Luxury real estate sales in Montreal post triple-digit growth

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When the first containments of the pandemic were announced, economists predicted Canadian real estate markets would suffer. In early 2020, it looked like sales would slow down and prices would drop. But then the opposite happened.

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A report released on Monday by Sotheby’s International Realty Canada on luxury home sales valued at over $ 1 million in Vancouver, Calgary, Toronto and Montreal found sales at this price point saw triple-digit growth in all markets during the first half of this year.

Sotheby’s International Realty Canada CEO and President Don Kottick said that in Montreal, 30 percent of properties that sold over $ 1 million did so above list price in the first half of the year 2021 – “never seen before” on the Montreal market.

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“We’ve never seen anything like this before,” Kottick said.

Between January and June, there were 990 sales of homes over $ 1 million in Montreal, a 112% increase from the corresponding period in 2020. Most were below $ 2 million, but sales also increased at higher prices. There were 169 properties sold for between $ 2 million and $ 4 million (a 138 percent increase) and 14 properties sold for over $ 4 million (down from just six the previous year).

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After a brief lull, sales of luxury condos also rebounded. Realtors sold 188 units for between $ 1 million and $ 2 million in the first six months of this year, a sales increase of 109% over last year. There were also 21 units sold for between $ 2 million and $ 4 million (up from 12 in 2020).

Ultra-luxurious sales are scarce in Montreal, but in January of this year there was also a record $ 11 million condominium sale at the Ritz Carlton – the most expensive condo sale in Quebec on record on Centris.

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“We have noticed an increase in demand in luxury, and even ultra-luxurious condo space,” Kottick said. “I think it all comes down to the fact that Montreal is a global destination. The fact that there is a lack of detached single-family homes has likely helped the condominium market as well.

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The factors driving the demand for luxury properties include low interest rates, growing work-from-home opportunities, and lifestyle changes brought on by the pandemic that have prompted people to leave, according to the report. look for more space.

But it’s not just the luxury property that’s hot. Bidding wars have become much more common at all costs. According to the Professional Association of Real Estate Brokers of Quebec (APCIQ), more than half of the homes sold in June in Greater Montreal were bought for more than the asking price. The median price of a single-family home in Greater Montreal is now $ 508,000, a 29% increase from a year ago.

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Kottick said there are two main sources of wealth fueling the real estate market: the personal savings of high-income families who filled their piggy banks during the foreclosure and the intergenerational wealth transfer from baby boomers to their children.

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The Bank of Canada estimated that Canadians saved an additional $ 180 billion during the pandemic, mostly thanks to high-income and high-income households. While much of this wealth is currently in bank accounts, some of that savings is likely earmarked for real estate purchases.

At the same time, the baby boom generation is starting to loosen the purse strings to pass on some of the wealth they have accumulated to their heirs. In 2018, Toronto-based research firm Strategic Insight predicted that approximately $ 1,000 billion in personal wealth would be transferred from generation to generation in Canada between 2016 and 2026.

Money is also flowing into Quebec from other provinces, and Kottick predicted that foreign investment would again become a notable source of investment in the luxury real estate market once immigration opens again. .

“Montreal is positioning itself as a global destination,” said Kottick. “It’s affordable, compared to other cities, and people just see it’s a ‘I want to live’ place. I think it has become much more attractive not only to people from other provinces, but also internationally.