Buyer's market: Why condos are on the cheap in Montreal
Published Tuesday, January 7, 2014 2:15PM EST
Last Updated Wednesday, January 8, 2014 7:37AM EST
Real estate agents and people trying to sell their properties are convinced there is a glut of condos on the market in Montreal, with two recent studies indicating prices will continue to slide in 2014.
Montreal's housing market is the weakest among Canada's four largest cities with a condo vacancy rate of 2.7 per cent, confirmed Re/Max. Toronto's vacancy rate is 1.2 per cent; Vancouver's is 1 per cent.
The Canadian Mortgage and Housing Corporation predicts condo prices will drop by 5 per cent this year.
Georges Gaucher, a real estate manager for Royal LePage, figures this will lead to deals for every location in Montreal outside the urban core.
"It is a buyer's market everywhere except downtown because the first place people will look at for condos is downtown," said Gaucher.
Sellers see little interest
Derek Rieger is one owner who has been trying to sell a condominium for months without any hint of interest.
With a larger family than his two-bedroom home can comfortably accommodate, he has been trying to sell his property since June without receiving a single offer.
Rieger said that comes even though he's dropped his asking price by $10,000, and the fact his condo does not have any monthly fees.
"We pretty much don't have any condo fees because we've adopted... it's almost like a co-op in the sense that when there's something to fix it gets fixed," said Rieger.
Meanwhile, new condos continue to be built throughout Montreal, especially in the downtown core, leaving owners of older buildings with a tough time making a sale.
Construction on multiple highrises began in recent years and the first properties should be ready for occupation this year -- the first new condo highrises in Montreal in two decades.
Owners of properties outside downtown say that what they lack in proximity to nightlife they more than make up for in affordability and charm.
Realtor Colette Birks is promoting a two-bedroom condo complete with garage in NDG, but hasn't had a nibble at her original $349,000 asking price.
She's now reduced the amount to $325,000.
"In my whole career I have never seen such a quiet market," said Birks, who is convinced the sluggish economy is making buyers timid.
"People are starting to be scared. You know, it becomes like a survival matter and you have to think that if you don't make money you have to live with what you have."