Since March 2020, when the World Health Organization announced we were all in the midst of a global pandemic, the housing market in Montreal has also clearly been affected by shutdowns and new social distancing rules. While real estate changes do seem to be stabilizing, how will this be impacting your next sale or purchase of a property?
Here is some information you might be hearing about:
1. Property Prices Continue to Rise
The math is pretty straightforward here: when there are less goods on the market that people want, prices go up. Simple, right?
After restrictions on real estate were lifted in May, we saw a dramatic spike in sales in the month of June. “First-time buyers drive up demand more than others because they aren’t selling a property in the process, leaving even less inventory on the market,” says Katia Samson.
In turn, home prices also went up, rising to 8.7 percent from March to June 2020, to hit a median price of $566,874 for a two-story house. It’s clear we’re in a seller’s market. “I’ve been a real estate broker for 25 years, and have never seen such a short amount of time between the moment a property hits the market and when it’s sold.”
The housing supply is also lower due to the pause the construction industry was obliged to take in March and April.
Experts predict prices will taper off a bit after the post-confinement rush dies down, but long-term price increases will likely be unavoidable—sellers, take note! Overall prices are expected to rise 3.5 per cent by the end of 2020, compared to last year.
2. What About Condos?
In the first quarter of 2020, the condo market was the most dynamic for sellers in the entire Montreal metropolitan area, with fewer than four sellers per buyer. A market is considered to be balanced (it doesn’t favour either vendors or buyers) when there are between eight and ten sellers per buyer.
According to statistics, the number of condominium properties for sale by individuals (not new constructions) jumped with 1,707 listings in June, an increase of 83% in one month. The bulk of these listings is for small apartments, mainly located in downtown Montreal and Griffintown.
“Yes, the market is changing when it comes to the resale of condos in Montreal, but if you’re a vendor and your property looks great, this shouldn’t worry you since prices are still seeing an increase. If you have any hesitations about putting your condo on the market at this time, Katia Samson Real Estate Group is here to answer all your questions and help you achieve the best outcome for the sale of your property!” says Katia Samson.
3. Changes to Mortgage Insurance
The Canadian Mortgage and Housing Corporation (CMHC) provides insurance protecting lenders if homeowners default on their mortgage. If a buyer has a down payment of less than 20% of the purchase price, mortgage default insurance is required, and is paid by the homeowner.
This past July 1st, the organization rolled out changes to the eligibility rules for mortgage insurance. Under the new regulations, the amount of debt for an insured mortgage will be lower than it was previously, the lender’s credit score will have to be higher, and the new homeowner will be required to use their own money—and not another loan—for their down payment.
“If you’re uncertain of how these new rules and regulations might affect you, let us put you in touch with a professional mortgage broker and see how you qualify for your next purchase,” says Katia. “If you want to sell your property or buy a new home don’t let the Covid pandemic slow down your life plans. We are all evolving through this new life change.”