Spotlight: Montreal Real Estate
After Toronto and Vancouver – Canada’s most talked about Real Estate markets – started to sputter in 2017, other cities started to garner attention. Cities like Ottawa, Montreal and Halifax have seen both sales and prices reach new heights while Toronto and Vancouver sales declined and went into recovery mode over the past two years. In this blog post, we wanted to take a look at Montreal Real Estate to shed some light on its market and the differences with purchasing here compared to Toronto.
Montreal is Canada’s second biggest city with 3.5 Million people living there, that’s a million more people living there than in Vancouver. Montreal flew under the radar because its real estate appreciation hasn’t been as sexy; not until recently when government regulation and insane price appreciation finally forced many Buyers to look east of Toronto.
| Price CREA October 2019 HPI | Median Condo Price | Sales October 2019 | Vacancy Rate 2018 Stat Can | Average Rent 1bedroom via Pad Mapper | Median Household Income (2015 Stats Can) |
|
|---|---|---|---|---|---|---|
| Greater Toronto | 814,000 | $540,000 | 8491 76,413 | 1.1% | $2,350 | 78,373 |
| Montreal Metro | 374,000 | $280,000 | 4211 43,750 | 2% | $1,530 | 61,790 |
Prices: If you’re feeling a bit over leveraged in Toronto, Montreal is the place for you. You can typically buy 2 homes in Montreal for less than the price of one in Toronto.
Housing Stock: Mystery solved: Toronto’s missing middle is in Montreal. Building in Toronto has centered around tearing down Main Street style buildings and war time bungalows to erect towers and urban mansions, looking for a Triplex in Toronto is a bit like finding a needle in a haystack. Montreal’s plex stock is rather plentiful. Many Urban neighbourhoods offer a wide range of income properties to choose from: duplex, triplex and detached style homes are equally prevalent. This abundance of housing is the likely contributor to more reasonable rental rates in Urban areas and keeps house prices in check.
More Renters: Montreal ownership rates sits among the lowest of all major Canadian cities at 56% while Toronto sits at 67%, both below Canada’s average of 68%. Montreal has been a very affordable rental option for those looking to live in a big city. It seems like word is getting out about their cheap rent as the cities vacancy rate more than halved, dropping from 4.6% in 2016 to 2% in 2018. Upward pressure on rental prices is likely to continue as vacancy rates remain tight.
Getting Around: With what feels like an infinite number of bridges and under passes in Montreal highways, traffic and construction feels equally horrible in Montreal and Toronto. However, if you live in Montreal you are much more likely to have a rail option within walking distance. While Toronto invested in street cars, Montreal stuck to subway and rail. This makes the sought-after, transit-friendly, walkable area within a 15 minute bike ride from downtown much easier to find and afford in Montreal.
Sold on Montreal? Here are some note-worthy differences to be aware with a purchase:
Deposits: In Montreal, it’s common to purchase a home without putting any deposit down or transfer of funds until your closing date. In Toronto, you’ve got to show them the money. A 5% range for a deposit is expected in Toronto and many Buyers will offer hefty deposit to strengthen their chances against another bidder. Sometimes Sellers in Toronto will even take a lower selling price, because they are worried a small deposit signals less chances the Buyer will be able to close on the property.
Conditional in Toronto vs. Montreal means different things: Typically financing and home inspection conditions in Toronto are written strongly in favour of the Buyer. Allowing the Buyer to get out of the deal if needed. In Montreal, the financing condition is a standard condition which is part of the purchase agreement (not written on a Schedule like Ontario). If you say you can’t find financing, the Seller has the right to force you to use a different lender of their choice, provided you can still meet the agreed upon terms. Very different from the opt out conditions used in Ontario.
Disclosure: In Montreal, they have a mandatory form that Sellers must fill out called a declaration by vendor. This document requires the seller to identify any known issues with the property they are selling. This type of form used to be more popular in Ontario, until a few vocal lawyers advised Sellers against it. For some properties in Toronto, it can be like pulling teeth getting an agent to answer some pretty standard questions. This is something I believe Toronto is getting wrong and Montreal is doing right. Buyers should have a right to as much information as possible to help them make an educated and informed decision.
Marketing and Viewings: Montreal is a little more laid back than Toronto and many local agents are still adjusting to the new pace of the market. Viewing a home in its entirety is often not possible prior to offering on property with multiple units. For example, it’s common to view one unit in a duplex and then submit an offer conditional on seeing the other unit. Open Houses are less common and often only on Sundays. Much like in Toronto, finding a good agent who understands how the market is changing and who goes the extra mile to ensure their clients have every advantage possible is key.
Till Death Do You Part: In Quebec, they have a rule for landlords that if your tenant is 70 or older, you cannot evict them. Even if it’s to take over the unit for yourself. This is how Quebec looks out for their elderly population, by ensuring they have a place to live into their old age. It does, however, pose an issue for buyers looking for a personal or investment property. Since the Montreal Real Estate market is picking up and rents are still fairly low, you may find a too-good-to-be-true property only to realize that an older tenant is paying $400/month.
Considering a move in Montreal or Toronto? Let me connect you with a great Realtor, email me here.
Looking for somewhere a little closer to home for your purchase? Hamilton has similar housing stock to Montreal and is working on transit improvements with a new LRT scheduled for completion in 2020. Reach out if you’d like to find out more!
