Montreal home sales sizzle in summer as Vancouver, Toronto chill
The Canadian Press
Published Saturday, August 5, 2017 8:03AM EDT
Last Updated Tuesday, August 8, 2017 10:36AM EDT
Forget Vancouver and Toronto -- Canada's hottest housing market these days may be Montreal.
The Greater Montreal Real Estate Board released data Friday showing that 3,075 homes were sold in July, an increase of 16 per cent compared with a year ago and the most for the month in eight years.
That contrasts with Toronto, where sales last month plunged 40.4 per cent while in Vancouver they dropped 8.2 per cent.
The price of homes in Montreal was also higher, albeit still well short of levels seen in Vancouver and Toronto. The median price of a single-family home in Montreal rose to $323,000, up eight per cent from July 2016. The median condominium price edged up two per cent to $256,000.
"For single-family homes, market conditions for resales are increasingly favouring sellers, which explains why price increases have been more sustained in recent months," Mathieu Cousineau, president of the GMREB board of directors, said in a statement.
While much attention has been focused on Vancouver and Toronto, Montreal's housing market has escaped the frenzied action that prompted the B.C. and Ontario governments to take action.
In April, Ontario introduced more than a dozen measures to improve home affordability, including a 15 per cent tax on foreign buyers. Since then, the average price for all properties sold in Toronto has shaved off nearly $175,000 from its peak of the year of $920,791, but it remains up year-over-year.
In Vancouver, the province imposed a 15 per cent foreign buyers' tax a year ago and the volume of transactions immediately tumbled.
While the number of sales in the city cooled last month, the composite benchmark price for all residential properties in the area cracked $1 million for the first time, coming in at $1,019,400, up 8.7 per cent from July 2016.
The slowing pace of sales in Vancouver and Toronto has also come as mortgage rates have started to move higher with the Bank of Canada's increase in its key interest rate target last month.
The increase by the central bank prompted the big Canadian banks to raise their prime lending rates, which pushed variable-rate mortgages higher. Bond yields also moved up, affecting the rates offered on new fixed-rate mortgages.
Ottawa tightened mortgage lending rules late last year, including the introduction of a stress test for all insured mortgages.