Experts split on when, or if, Montreal's skyrocketing real estate prices will come back to earth
MONTREAL -- Earlier this month, a Senneville home that was built in 1865 by former prime minister Sir John Abbott sold for $8 million, making it the most expensive house sold on the Island of Montreal so far this year.
For the price, the buyer got 33 acres of land, five bedrooms and two formal dining rooms, but according to the real-estate agent who sold the property, the new owner has a lot of work to do.
"There are millions of dollars that need to be put into this property to upgrade it, on the outside (and) on the inside," said Joseph Montanaro.
While the property is anything but typical, it shows just how far real estate in greater Montreal has come in the past few years. All over the island and beyond, realtors are seeing a phenomenon that was almost unheard-of five years ago: homes are regularly selling for well above the asking price.
In Hampstead, realtor Rebecca Sohmer listed a Dufferin St. home last month. On that same street, she sold three homes for $1 million each at the beginning of the pandemic and says that became the talk of the town. So she listed the latest home at $1.09 million.
"We had 34 visits in three days, we had nine offers all over asking, and it ended up selling for $1.3 million," she said.
In Pointe Claire, realtor Mark Broady is regularly selling houses well above the asking price.
“We're often listing properties where we think the market value will be and they end up selling for way over what anyone could have expected,” he said.
In Ste-Adele, realtor Michel Desjardins said he’s never seen so many offers coming in significantly above the asking price.
“We list a house on Saturday and it's sold on Sunday. We never saw that in the Laurentians for many, many years,” he said.
Many realtors have dubbed it "the COVID market."
"A lot more people are saying 'You know what, I don't want to live in this high-rise building,'” said Broady.
“'I want my own space, I don't need to commute anymore, I'm working from home, my wife is working from home, we want a backyard.'”
According to the Quebec Professional Association of Real Estate Brokers, the prices of single-family homes are rising dramatically all over the province. On the Island of Montreal, they were up 19 per cent last year; in Laval, 20 per cent; and on the north shore 27 per cent.
“Everybody comes from Montreal, Laval, the South Shore, everybody wants to come up north,” said Desjardins, who adding they've never seen so many bidding wars.
But one economist recently made headlines when he told BNN-Bloomberg that the Canadian housing market may be one of the biggest bubbles ever.
‘We have a situation where home prices are up 18 per cent, year over year, with practically no wage growth," said David Rosenberg, the chief economist of Rosenberg Research.
Others, however, don't see a housing market crash on the horizon. The Canada Mortgage and housing Corporation said it’s keeping a close eye on the market, but at this point, there are too few sellers, and that’s keeping supply low and prices high.
“We would really need a [significant] increase of supply in the market, and a decrease of demand, to go back to a buyer's market, and we’re far from that," said Francis Cortellino, a senior economist with the CMHC.
Real-estate agents are split on where the market is going.
“I'm telling everybody, the price that we're asking is a COVID price and in two, three, four years, it won't [be] worth, probably, that much money," said Desjardins.
But Sohmer sees it differently.
“I don't see an end to it, I really don't,” she said. “There are too many buyers for the properties for me to believe it's going to end anytime soon.”