Artist’s conception of the Maestria residential towers in Montreal. Devimco’s Marco Fontaine said the twin condo towers appeal to European clients, among others, who are taking advantage of a favourable Canadian dollar exchange rate. (Courtesy Devimco/Fonds FTQ/Fiera)
The demand for new condos and rental housing has remained stable in Montreal despite the COVID-19 pandemic, but that picture could change if the unemployment rate remains high and immigration rates fall.
Those were some of the conclusions from three of the city’s major residential developers at a June 12 webinar on real estate development and the residential market in Montreal. The event, presented by the Institut de développement urbain du Québec (Urban Development Institute of Quebec), attracted about 600 viewers.
Marco Fontaine, vice-president, real estate development, residential and marketing at Devimco, said the outlook is for uncertainty in 2020 and optimism for 2021.
“If we succeed in flattening the curve, I think the market will pick up faster than we think,” he said. “Overall, the demand is still there. That’s very positive.”
Fontaine said Devimco president Serge Goulet challenged salespeople a few weeks ago to sell 100 condo units by mid-September. That goal should be reached by mid-July.
“It’s very good news. The market is there. I believe good projects can go ahead without any concerns.”
Mixed results at Devimco projects
He noted, however, condo sales have been harder to finalize at the Quartier Solar Uniquartier mixed-use project in Brossard on the South Shore, which is targeting second or third buyers.
The buyers, who are often empty nesters and baby boomers, have to put their current houses up for sale, which has made them more reticent.
Sales are going well at the 264-unit Auguste et Louis condo development in the Quartier des Lumières, next to the current CBC/Radio-Canada headquarters. “We’re really surprised.”
There has also been strong interest in the Maestria project (with 58- and 61-storey towers) from European clients, who are taking advantage of the favourable Canadian dollar exchange rate.
Laurence Vincent, co-president of Prével, said reservations were high for two new projects it launched in February, Quartier Général in Griffintown and Esplanade Cartier near the Jacques Cartier Bridge.
By April, clients were still on board but had lots of questions. Still, “sales, for the most part, were converted.”
Although sales are taking longer to complete, interest has remained strong and buyers are asking few questions about prices.
“Clients find prices to be very acceptable,” she said. “Our products have a very good quality-price ratio. (They’re) not excessively luxurious. People feel they’re getting value for their money.”
Who is buying Montreal condos
Vincent said, in general, there are three types of clients for its projects in the coronavirus era:
* The first group thinks confinement will end soon and we’ll start to consume and live like before. “I have money, I’m not afraid” is their view;
* Second, there are the cautious people who look forward to life getting back to normal, but don’t want to put themselves at risk in terms of making the condo buying leap;
* The third group is comprised of people who are scared about going back to normal – and are prepared to take money out of the bank and hide it under the mattress.
The first group is comprised mostly of young people, for whom “it’s life as usual. Nothing has changed for them.”
Middle-aged people, primarly empty nesters who are more cautious about buying, make up the second group, and the third is older.
The scenario is similar to what’s happening in Asian and European markets which are emerging from confinement, Vincent said.
Montreal to remain “desirable city”
Vincent downplayed predictions people will move away from cities as a result of the pandemic. There have always been people who have predicted the end of cities, but the forecasts have not come to pass.
She said if there is a small exodus to the suburbs or the countryside, it will be temporary or by people who already planned a move.
The pandemic should not serve as an excuse to return to old habits of urban sprawl and agricultural dezoning “because it’s not a viable model,” Vincent added.
Stéphane Côté, president of DevMcGill, said Montreal’s advantage is that it’s a medium-sized city with relatively easy access to nature.
“In that respect, it will always be a desirable city.”
The company sold about 30 per cent of Phase 3 of Tak Village – a Scandinavian-inspired condominium tower and townhouses project in Rosemont – in two or three weeks after it closed its sales office and shifted sales online.
Côté said doing things virtually can work in unexpected ways.
For example, DevMcGill received court permission to conduct an online meeting to transition a new condo to its board of directors, one of the first times this has been done in Quebec.
“It worked,” he said. “We’re finding new ways of doing things, ways that will stick.”
Fontaine said he is optimistic about the future, but identified four risks that lie ahead: The possibility of a second wave of COVID-19, the potential for high unemployment, the fate of government support programs, and the impact of the pandemic on immigration – Montreal was expected to have between 41,000 and 44,000 immigrants in 2020, which may not be reached.
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
