MONTREAL – Jacques Leclerc left Detroit for Montreal in 2019 with a simple plan.
He and his fiancée Emily Ciccia planned to rent for a year and then buy a place with a 20% down payment in Montreal.
We are in 2022, and the couple is still renting in Pierrefonds, frustrated, and starting to think that a house purchase will not happen.
“Honestly, I never think we’ll be able to afford anything on the island, not at this rate,” Leclerc said.
ISLAND OF MONTREAL OUT OF REACH
The couple recently made an offer on the asking price for a house in Saint-Lazare, but they were outbid. It was a result they had already experienced several times on the island and now had to face in the suburbs.
Leclerc is one of many potential home buyers who are seeing record house price increases sway where they can afford to buy, if they can.
Royal LePage’s recent home price survey for the Greater Montreal area showed an increase of nearly 20% in the overall home price, which is now $532,600.
The median price of a detached single-family home also rose 20% to $595,500, while the median price of a condo is $428,900 (up 18.2%).
The company expects prices to continue to rise in 2022 due to a housing shortage and continued demand.
Royal LePage general manager Georges Gaucher said Montreal is experiencing what Vancouver and Toronto have witnessed for decades.
Montreal accounts for about 40% of Vancouver’s prices and 44% of Toronto’s.
“We were historically behind,” Gaucher said.
Gaucher said with Quebec’s improving economy and job opportunities, investors entered the market ready to buy. The pandemic has added to higher prices forcing buyers to go further to find a place, a new trend.
“What we weren’t used to was going very far into the suburbs or the countryside to buy a first home,” Gaucher said. “It’s something unknown in Montreal.”
In addition, sectors formerly considered less attractive – Hochelaga-Maisonneuve, Montreal-East, Rosemont, Montreal-North – are being studied.
The situation is exactly what happened to Leclerc and Ciccia. The couple wanted to buy on the island, but resigned themselves to the fact that it might not be possible.
The house in Saint-Lazare the couple was outbid on needed a new roof, water heater and other repairs and they still couldn’t afford the price offered by someone else.
“What I want to know is who is buying these homes well above the asking price? said Leclerc.
At the rate the market is going, the couple, who both have well-paying jobs with no children or other major financial obligations, feel like they’re in a race in which they can’t keep pace.
“Either like I need to be able to borrow money that I can never pay back to buy this house, or like I need a government grant to buy it,” Leclerc said. “The cost of everything now is like I can never catch up at this rate.”
Gaucher said the conditions in 2022 are the same as in 2021.
“Where we have this explosion of buyers,” he said. “Jobs, interest rates, which brings consumer confidence, and then the flexibility of working from home. Those were three major things that created the market last year.”
Additionally, Gaucher said the trend of empty-nesters selling their homes and moving to a condo or seniors’ residence hasn’t continued during the pandemic.
“People were scared to do that, so it didn’t happen,” Gaucher said.
Even with interest rates expected to rise in 2022, real estate agents believe the market will remain a seller’s market.
“There’s a lot of pent-up demand out there,” Gaucher said. “The problem we have is inventory, and we’ve known that for years and years.”