As millennials continue to be priced out of many urban housing markets across the Greater Toronto Area, Montreal is becoming an affordable haven for younger buyers, but the wide selection and relatively low prices won’t last forever.
According to the Royal LePage House Price Survey for the first quarter of 2019, the Greater Montreal Area showed the greatest home price appreciation out of the three largest metropolitan areas in Canada, with the average price increasing 5.5% year-over-year to $406,332.
"Greater Montreal kept up its momentum with the eleventh consecutive year-over-year price increase, rising above four per cent in the first quarter of the year," says Dominic St. Pierre, Vice-President and Director of Royal LePage for the Quebec Region. "Unlike many other Canadian markets, which saw a slowdown in activity and prices, the Greater Montreal Area market remained tireless this quarter, despite the harsh winter weather. In the fourth quarter of 2018, we believed that price and sales growth would decline by the start of 2019, but the area once again defied the odds. As a result, 2019 began with a very successful quarter, gradually shrinking the gap between the Montreal and Toronto markets."
In Montreal Centre, the average price soared 8.1% in the first quarter of the year, compared to a 3.4% increase in the GTA and a 1.5% decrease in Greater Vancouver. Though Montreal showed the strongest price gains during this time period, the GTA and Vancouver are considerably more expensive still, with average prices of $836,425 and $1,239,306, respectively.
Just look at two-storey homes in the GMA; the median price increased 6.4% to $514,412. Compare this to the median priced two-storey home in Toronto coming in at $1,250,910, which is a 4.8% year-over-year increase. So, Montreal’s two-storey homes are more affordable and are also appreciating at a greater rate.
This is a draw for families, millennials, and even retirees and empty nesters looking to downsize. Montreal has more options for first-time buyers, more space for growing families, and money to be made for older generations who choose to sell in the GTA and move into a condo or bungalow in Montreal.
"Crowned 'the leading Canadian city for economic growth' by the Conference Board in late 2018, Montreal is increasingly attractive to millennials,” says St. Pierre. “The city's economic health is creating increased demand among young buyers competing in the condominium market, continually driving market trends. The city's core is also attracting more foreign buyers as highlighted in the provincial budget, but these remain a small proportion of the overall transactions.”
The interesting thing about Montreal’s condo market is that supply has been high over the last few years, but the prices are still on the rise because the demand is so strong. The median condo price in the GMA in the first quarter of 2019 climbed 5.2% to $328,488. Royal LePage predicts the median price is on course to soon surpass $400,000. The median price of a bungalow in the GMA increased 3.7% to $316,159.
Could the relatively affordable home prices in Montreal be enough to convince skilled professionals, families, retirees and millennials to move out of the GTA? Toronto could very well be at risk of a brain drain to Montreal.
A recent report from the Royal Bank of Canada says that soaring housing prices aren’t forcing millennials out of major cities like Toronto, Vancouver and Montreal, but it doesn’t mention much about millennials moving within these top cites. And the report does note that all three cities have become too expensive for many millennials.