The low level of listings and the increasing demand in the Greater Montreal Area (GMA) might trigger a “perfect storm” this year, according to a forecast by Royal LePage.
During the fourth quarter of 2019, GMA reported a 6.3% gain in aggregate home prices to $433,993, the highest price growth since 2010.
Of all housing types, two-storey homes and bungalows posted the most significant increase in median prices at 7.2% and 5.9%, to $548,374 and $336,981, respectively. Condominiums also posted an increase in median prices at 4.4% to $338,148.
While the last quarter of the year is historically the least active time of the market, GMA still posted growth due to the stable demand, said Dominic St-Pierre, general manager of Royal Lepage in Quebec.
“This increased competition has not only reduced inventory, but it has also changed seller behaviour. Sellers are more likely to wait until they find their next home before listing their current home,” he said.
St-Pierre said this could indicate that sellers are also experiencing the same frustration with little selection to choose from and escalating prices.
“This exacerbates the inventory problem,” he said.
The upward trend in prices over the past three years can also be attributed to the region’s good economic performance.
“We are currently in a ‘perfect storm’ for an exceptionally competitive spring market: interest rates are low; employment rates are healthy; listing inventory is limited; and, all buyer segments are active, including first-time buyers, baby boomers, newcomers and foreign buyers,” St-Pierre said.
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Written by Canadian Real Estate Wealth.
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Canadian Real Estate Wealth