In 2013, home sales in Montreal fell to their lowest level in nine years.
Gone are the days of the booming market that flourished in 2011 and 2012, said Bill Palmer, an NDG real estate agent.
“That was a serious sellers’ market,” he said. “No matter what price we would put on something it would go for more – now, it's not that.”
Palmer said that houses nowadays are selling for less and taking more time to sell.
Several real estate agents blamed the federal government’s recent decision to tighten mortgage rules.
In the summer of 2012, new rules saw maximum amortization periods drop from 30 years to 25, and home equity loans max out at 80 per cent of a property’s worth, a five per cent drop from previous regulations.
“People who used have a mortgage are not getting approved right now,” said realtor, Francois Mackay.
Some feel that, moving forward, increasing interest rates may become problematic for the real estate market.
The Laurentian Bank believes five year mortgage rates could hit six per cent by 2015, today, they’re sitting at around 5.3 per cent. On the average mortgage, this increase would translate to a cost of $120 more per month.
On the flip-side, interest rates rise when the economy is strengthening; so many real estate agents are predicting stronger sales in 2014, though still not quite on par with 2012.
Despite a not-great 2013, Palmer thinks real estate in Montreal remains a safe bet.
“We’ve gone through two referendums and the first house that I bought is now worth 10 times what I paid for it in 1980,” he said.
Quebec’s finance minister, Nicolas Marceau, isn’t taking anything for granted though, and asking the federal government to protect Montreal’s housing market, asking that mortgage rules not be tightened any further.
