Despite the COVID-19 pandemic, Montreal broke a real-estate record in July

Toronto home prices set new record Canada's largest housing market has come roaring back, as prices climbed to a new high in July after COVID-19 lockdown measures put a chill on activity earlier in the pandemic. BNN Bloomberg digs into the drivers with Toronto Regional Real Estate Board chief market analyst Jason Mercer.

MONTREAL — Canada’s two most competitive housing markets—Toronto and Vancouver—are surging again to historical levels, even in the midst of the pandemic, according to statistics released this week.

Montreal broke a real-estate record in July, too, says Quebec’s association of real-estate brokers. But it’s too complicated to say the market has simply come charging back, says its president.

There have been several months full of unexpected twists and turns in housing demand in the greater Montreal area—plus the rural areas just outside it—and it isn’t clear how it will all end, said Julie Saucier, the president of the Quebec Professional Association of Real Estate Brokers, in an interview with CTV News.

In a release Thursday, the association described off-the-charts numbers: 5,356 sales were concluded in July in the greater Montreal area, a 46 per cent increase over last July, which was already very busy.

This year set a new sales record for July. Prices are still “rising sharply,” Saucier added in the release.

But it’s important to remember that some of this is catch-up after the pause this spring, Saucier said in an interview.

After heating up extremely quickly in the last couple of years, Montreal’s real estate market was suddenly paused for three months because of the pandemic, and right during the three months that are normally the busiest—March, April and May, she said.

The current numbers could be coming from people making up for lost time.

“Right now the market is really crazy in Montreal and the [greater Montreal area],” she said. But “it’s really tough to say: is it because people waited, and now they can go back and sell their house? Or is it really that we're seeing a new trend?”

A COVETED EXTRA ROOM

There are, however, other new trends that are emerging now that nobody could have predicted six months ago. For example, people are snapping up houses with an extra room, but exactly why is still a mystery in many cases.

“What we're trying to see,” said Saucier, is whether it’s that “people want to have an office at home, or an extra room where they'll be able to work from home.

“Or is it that I want one of my parents to live with me because I don’t want them to go in a CHSLD, something like that?”

The most sought-after kind of property in Montreal this month was the single-family home, with a 48 per cent jump in sales.

Condos in high-rises are taking the longest to sell, Saucier said. Buyers seem to be primarily worried about potential infection in all the common areas, such as elevators. The draw of a downtown location isn’t what it once was, either.

The fact that prices are climbing in Montreal is also partly a function of a buyer-seller ratio that’s gotten out of whack recently, said Saucier.

Despite sales skyrocketing, the number of active residential listings on the Centris listings system in July was 24 per cent lower than last year.

“The inventory was so low because of the pandemic,” Saulnier said. “The balance was not there anymore.”

A lot of people are putting off selling their homes because they’re “nervous” about having potential buyers coming in and out of their houses, possibly bringing the virus with them, she said.

COUNTRY LIVING

Not too surprisingly, the rural areas around Montreal have seen a transformation in the last few months, but again, it’s hard to know exactly what I’ll mean in the long term.

“In the Laurentians…it’s completely crazy and it was not like that before the pandemic,” said Saulnier.

“So is it people who want to have a cottage, or is it people who really want to move there, and work from home, and they know it’ll be easier to have a bigger home?”

The Eastern Townships and some other areas around Montreal have seen similar activity, she said.

However, “it's mainly in Montreal. We checked in Quebec City and we don’t see the same trends.”

Given all the new factors in play, it’s very hard to predict the long-term future of real-estate prices right now, especially for certain categories of properties, Saulnier said.

“We think that probably the prices will go a little bit up still,” she said. “I don’t think it'll drop but it'll probably be stable.”

One thing that hasn’t gotten much attention yet, but which Saulnier predicts will have significant fallout, is the pause on immigration. The arrival of new immigrants has been driving property sales in Quebec more than many people realize, she said.

“We had a lot of immigrants coming from other countries and it’s not possible right now, so I think this will have a huge impact,” she said.