Montreal’s luxury housing market is expected to be the strongest
of the spring season.
According to a new report from Sotheby’s International
Realty Canada, the city’s hot real
estate market shows nary a sign of regressing.On the heels of a 20%
year-over-year increase in sales over $1 million in 2018, Sotheby’s
expects a sales record this spring.
“With strong economic and political fundamentals driving local
confidence and demand, top-tier sales escalated in the first two
months of 2019,” read the luxury housing report.“Overall, $1m-plus
residential real estate sales (condominiums, attached and
single-family homes) were up 6% year-over-year to 111 units sold in
January and February.Two luxury properties sold over $4m during
this time, up from zero the same months in 2018.”
Of particular significance, luxury condos in Montreal surged 53%
year-over-year through January and February 2019.During January
alone, transactions in Montreal totalled $1.63 billion, which is an
18% lift over the same month in 2018.
“We expect the Montreal market to continue with its very healthy
year-over-year increase in activity,” Sotheby’s President and CEO Brad
Henderson told CREW.“It will add somewhat to the upper pressure to
price, particularly in the central region.We don’t see risk to that
forecast, with the possible notable exception of a foreign buyer
Montreal mayor Valérie Plante said that the city government will
consider imposing a tax on foreign home buyers if the measure will
help guarantee long-term affordability.
Such a levy has already been implemented in Toronto and
Vancouver, to considerable effect.
“Here in Montreal, this is not where I’m going for now, though
we are really checking on the market on regular basis,” Plante told
“If needed, we might go there, but right now we’re using
different tools that we have to make sure we have this balance of
creating social and affordable housing.But for that, I need both
provincial and federal help.”
For some time now, Montreal has outpaced Toronto and Vancouver
in terms of home price growth, according to the latest edition of
the Teranet–National Bank of Canada House Price Index.
buyers now prefer Quebec, Alberta, and Nova Scotia
In February, Montreal prices increased by 0.36% from the
previous month and 5.15% year-over-year, to reach a historic high
for the month.In comparison, Toronto prices fell by 0.22% from
January to February, and grew by 3.56% year-over-year.Vancouver’s
declined by 0.68% monthly, and shrunk by 1.11% annually.
Overall prices across Canada decreased by 0.4% month-over-month
in February, and were only 1.87% larger than
An influx of migrants is boosting Prince Edward Island’s home
construction activity, making the province emblematic of Atlantic
Canada’s residential real estate strength this year.
The latest analysis by the Conference Board of Canada stated
that the region will enjoy strong economic performance in 2019, and
P.E.I.is set to be the leader with its 3.2% growth – indeed,
surpassing the rest of the country.
“Over the next two years, the Island should outpace nearly every
other province in the country when it comes to its rate of
population growth.Consequently, the construction industry is set to
surge this year, thanks to new housing developments on the Island,”
the Board stated, as quoted by The Canadian Press.
“Add to that the impressive tourism prospects and the elevated
demand for P.E.I.products boosting exports and manufacturing, and
economic growth in the province should continue to outpace the
Canadian average -- a feat that P.E.I.has achieved every year since
Brunswick property tax stifling investment in apartments
As a whole, Atlantic Canada’s home-buyer purchasing power will
benefit from the region’s robust economic growth this year, largely
propelled by service-sector stability, rising exports, and growing
The Board pointed at rising oil production as a major
contributing factor to Newfoundland and Labrador,
In today’s real estate milieu, where cash flowing properties are
becoming more sporadic by the day, the rent-to-own model is
emerging as a superior strategy with a favourable buy-in.
Helping tenants take eventual ownership of a property by giving
them a stake in their own success, rent-to-own investors only have
to put 15% for a down payment, enlisting their tenant to put up the
“This is where a lot of the profitability of rent-to-owns is
coming from,” said Rachel Oliver, managing partner of Clover
Properties.“Eighty percent comes from the bank, 5% from the
tenant-buyer and you’re only in for 15% at a time when you can’t
buy a residential property for less than 20%, but we found a way to
“The sweet spot for a lot of rent-to-own properties would be an
initial investment of $70,000 to 90,000.”
Rent-to-owns are ideal for supplementing income right
away.Rather than banking on long-term appreciation the way most
downtown Toronto condominium investors do, RTOs can yield anywhere
from $600 to $900 a month in cash flow, after expenses.
But the beauty of rent-to-own investment properties is that you
can leverage your personal residence or existing rentals to start
building a rent-to-own portfolio that actually pays for your
lifestyle.For example, a simple
This year, national home sales activity will likely fall to its
lowest point since 2010, according to the Canadian Real Estate
Association’s updated outlook.
The prediction followed the considerably weaker nationwide sales
in February, with a 4.4% annual decline and a sharper 9.1% drop
from January, The Canadian Press reported.
Aggregate nationwide sales in 2019 will shrink by 1.6% to
450,400 transactions, CREA cautioned.Meanwhile, 2020 transactions
will see a 2% gain to reach 459,400 sales.
The average sales price across Canada last month was $468,350,
falling by 5.2% annually.Excluding the elevated-cost environments
of Toronto and Vancouver, the average price stood at a little under
Read more:Significant headwinds to impede 2019 housing
Data from the Canada Mortgage and Housing Corporation also
showed that these developments have accompanied a slowdown in new
home construction nationwide.
The seasonally adjusted annual rate of housing starts declined
to 173,153 units in February, markedly lower than the 206,809 units
in January and failing earlier predictions of 205,000 units.
CMHC cited mortgage rate hikes and economic sluggishness as
major factors in the lower starts volume.
“Although housing starts seemed to be unscathed by the new B-20
regulations that took effect in January 2018, higher borrowing
costs and tougher mortgage qualifying conditions
While smart cities may be imminent, how they’re developed is
still a question mark. Fortunately, Vancouver and Surrey will
soon have answers.
Both cities are exploring how to develop their respective
corridors with tomorrow’s technologies by using superlative
international projects as inspiration.The cities’ shared goal of
improving residents’ lives will be realized through a competition
involving companies from all over the world, with the winner
receiving $50 million to fulfill their visions.
Jesse Adcock, the City of Vancouver’s chief technology officer,
says the chosen projects will have to improve citizens’ safety and
mobility, while reducing greenhouse gas emissions and
“We provided the physical characteristics in each city’s
corridor and asked the industry how their technology projects will
solve particular problems,” she said.“We had over 172 proposals
come in from all over the world that represent hundreds of
projects, and we managed to shortlist them down to 55 vendors and
Residents, businesses and other stakeholders have also been
encouraged to provide as much
input as possible around six
themes put forth by Infrastructure Canada, and while it’s still too
early to describe what smart cities in Vancouver and Surrey will
look like, they will incorporate intelligent traffic and data
collection systems, censors, autonomous shuttles and last mile
“By having a strong
Montreal’s home price growth is considerably outstripping the
national average as well as the pace set by the leading markets,
according to the Teranet–National Bank of Canada House Price Index
covering February 2019.
The city’s real estate prices increased by 5.15% year-over-year
in February, reaching a historic high.To compare, the Teranet HPI
found that overall prices nationwide saw only a 1.87% annual
increase, which was noted to be the third smallest non-recession
increase behind July and August of last year.
“The market peak was reached in September 2018, and prices are
down 1.43% from there,” Better Dwelling stated in its analysis of
In addition, Toronto saw a 3.56% annual increase, while
Vancouver suffered a 1.11% shrinkage during the same period.
Read more:Montreal’s affordability drives much of its
The Montreal real estate segment is also benefiting from a
strong economy and a vibrant job market, the combination of which
is boosting purchasing power of the city’s working-age Canadians,
according to the Canada Mortgage and Housing Corporation.
“The Montreal and Québec areas have shown strong economic growth
and particularly vibrant job markets in the last two years.This
certainly contributed to the financial stability of households and
supported their ability to make their mortgage payments on time
Commercial property investment in Alberta significantly grew in
Q4 2018, largely fuelled by the province’s two most important
markets, according to Altus Group’s latest analysis.
Calgary saw its third consecutive year of total investment
growth, reaching an annual total of $3.7 billion.However, Altus
Group warned that considerable uncertainty remains.
“2018 saw increases in investment across all sectors when
compared to the previous year, however this has not translated into
the higher volumes seen in the past,” Tatterton explained.
“What it has demonstrated is that the market is continuing along
a path of recovery, and until some of the uncertainty surrounding
the greater economy is resolved, it is likely that 2019 will follow
a similar path as 2018.”
Calgary’s office segment helped propel the market to its stellar
performance, with its 21% annual increase in investment value to
reach $960 million.The industrial sector also experienced its best
year over the past decade, with 132 deals representing an
investment total of $758 million.
The city’s apartment investment also grew by 8% last year, with
Q4 accounting for 68% of this volume.The ICI land market had a 27%
increase, while residential investment went up by 18%.
Read more:Commercial property market heavily leans upon
Meanwhile, Edmonton’s commercial activity
As cities around the world grow too expensive for young
families, they’re renting longer, and this new demographic could
provide landlords with stable tenancy for years.
But landlords need to be flexible.
Craig Watson, a landlord and sales agent with REMAX Escarpment
Realty Inc., says that by allowing tenants to baby-proof his rental
properties, he scarcely worries about vacancies.
“The last couple of years have been really challenging for young
families, whether first-timers or new buyers, because they have to
deal with the mortgage rules in place,” he said.“They’ve become
more prominent on the renting side.I’ve had many more young tenants
than I had many years ago.”
A good rule of thumb for any property investor is that they
should cater to their tenants, and as young families struggle to
become homeowners, Watson advises being accommodating.
“Be aware of their requirements so that you can best meet their
needs,” continued Watson.“When I have people requesting these
things from me, I don’t have any problem with it.You’re looking at
families coming in and you want them to feel safe and secure, and
as a landlord I’m trying to anchor in that tenant to a certain
point.It’s my property, but their home, and I want them to love
where they live.”
The rest of 2019 might bring with it major risks – including a
sluggish national economy and the knock-on effects of previous
mortgage hikes – that can lead to less new homes built in Canada’s
major markets, CIBC economist Royce Mendes warned.
“Residential investment was downright ugly in the fourth
quarter, and the latest reading on housing starts only added to the
bad news on Canadian homebuilding,” Mendes told The Canadian
Latest numbers from the Canada Mortgage and Housing Corporation
showed that the seasonally adjusted annual rate of housing starts
fell from 206,809 units in January to 173,153 units last month,
considerably lower than prior predictions of a pace of 205,000.
“Prior to this reading, starts had seen a bit of a renaissance,
rising back above 200,000 for four straight months.But the market
has been a contending with the effects of higher interest rates and
stricter lending standards, and a pace of 200,000 looked unlikely
for the year as a whole,” Mendes added.
Read more:Multi-family starts predominant in the hottest
These figures came after the weakest January of home sales since
2015, according to the Canadian Real Estate Association.
“As a leading indicator of economic activity, February’s steep
decline in housing starts may raise some
New Brunswick’s property tax has led to virtually zero growth in
new apartment investment, according to market players and
“It is stopping investors from coming here, it is stopping
people coming in and purchasing income properties, and it is also
hurting our economy,” according to Pamela Doak of the Fredericton
Real Estate Board, speaking to GlobalNews.ca.
These assertions were supported by Statistics Canada numbers,
which indicated that apartment investment has grown in Nova Scotia
between 1994 and 2018, while remaining flat in New Brunswick over
the same period.
Data from the Canadian Real Estate Association showed that the
market’s average sales prices make it a relatively affordable
option, with the single-family home benchmark as of 2018 at
$177,200 (vs.the national average of $488,600).
However, this is only part of the picture.Research by real
estate information portal Zoocasa has found that keeping a home in
New Brunswick is particularly costly, with Saint John having the
highest residential property tax rate in Canada (1.785%).
number of PEI, BC locals burdened by insolvency
The New Brunswick Real Estate Association has long pushed for
legislative changes, as the province is the only jurisdiction in
Canada that has a non-owner occupied levy
“We’ve been lobbying basically since 2010
Master-planned communities have the obvious advantage of
elaborate planning that standalone developments don’t, and that
makes them superior investments.
“Master-planned communities have the advantage in that you know
how the community will change over time,” said Brad Jones, VP of
development at Wesgroup in Vancouver.“You know how the community
will grow and which retailers are coming on board.There are also
parks, schools and a clear ability to understand how your
neighbourhood, and your investment, will change over time.”
Wesgroup is in the midst of developing River District, the
largest master-planned community in Vancouver, that has 54
development parcels over approximately 130 acres.In total, the
community expects about 15,000 residents will be spread across
7,000 units of housing.
“River District has the unique advantage of one company doing
all the buildings, doing all the master-planning work and owning
all the retail and commercial space,” said Jones.“Your investment
is going to be looked after by us because we’re looking after our
own investment, too.We’re buying into the future of the community,
like every buyer is, rather than just a few buildings.We’re the
landlord for the grocery store, the bank and the liquor store.We’re
looking after the community’s reputation by building and thinking
There are three major phases, the second of which is under
construction to build
In recent months, more multi-family buildings were constructed
than any other housing type in Canada’s hottest markets, according
to a new report by the Canada Mortgage and Housing Corporation.
“The national trend in housing starts resumed its downward
trajectory in February while still remaining above historical
average,” CMHC chief economist Bob Dugan said.
The Crown corporation said that despite the nationwide housing
starts trend falling to 203,554 units in February 2019 (from the
207,742 units exactly a year before), multi-family complexes
represented much of recent home construction activity.
“Both single-detached and multi-unit dwellings starts trended
lower.Higher mortgage rates combined with still-favourable, but
less stimulative economic conditions have contributed to softer
demand on new home markets in urban centres.”
Vancouver, in particular, saw the predominance of multi-unit
buildings in new projects.Condo starts significantly increased in
the 12 months ending February 2019, accounting for 77% of the
city’s new housing units last month.In contrast, single-detached
starts fell by 24% annually.
demand to boost further apartment construction – CMHC
Meanwhile, Toronto’s lower February numbers mainly stemmed from
low condo apartment starts, although demand for the asset class is
not stopping any time soon as “sales of new condominium apartment
starts have been strong in 2017 and 2018 and these units
The tech segment now serves as a vital bedrock of the Canadian
commercial real estate sector, according to a new analysis by
In its newly released 2019 Commercial Real Estate Canada
Investment Forecast study, Marcus &Millichap noted that
tech firms’ demand for usable space will foster greater investment
in the oft-ignored outskirts of major metropolitan markets.
“Elevated pricing expectations and fewer high-quality listings
in downtown areas motivate investors to broaden search parameters
to suburban locations near major metros.Higher yields beyond the
urban core will be a large driver to sales activity in 2019,” the
Moreover, tech giants such as Microsoft, Google, and Amazon –
which have already taken roost in Canada’s leading commercial
markets – have been predicted to hire new workers in the tens of
thousands over the next few years, as well as spend billions in
office expansions during that same period.
“Microsoft currently has 2,300 employees in the country and
14,000 partners, which could grow to 60,000 overall jobs between
employees and partners.Amazon will also grow substantially with
plans for 6,000 new jobs across corporate offices in Vancouver and
Toronto and multiple new fulﬁllment centres,” the report
firms are the foundation of the commercial segment’s
Toronto, as a
Despite the e-commerce disruption, the retail market in Canada’s
key markets is expected to remain strong through 2019.
In fact, according to Marcus &Millichap’s 2019 Retail North
American Investment Forecast, downtown storefronts are proving
impervious to the convenience proffered by online retail.The report
notes that service-oriented businesses, like fitness and dining,
“Visitor expenditures rose 2.4% in the third quarter of 2019,
carried higher by strong domestic demand,” read the report.“Tourism
spending has been a substantial driver to luxury brand expansion as
visitors comprise a large portion of all high-end sales, lifting
investor interest in high street assets as they are often more
While internet-based sales increased 20% over the past year,
they only comprise 4% of Canada’s retail activity.Still, retailers
are bracing for change by embracing omnichannel approaches to
remain afloat.Luxury retail is also expected to remain strong
through 2019 and compensate for weaknesses in the mid-market
category caused by Sears, Lowe’s, Gymboree and others.
Montreal, Canada’s second-most populous city, is replete with
international and discount retails, and as the it rides a wave of
newfound prosperity, brands are vying for to establish a presence
in the city.Tenant demand is so strong in the city that developers
are responding with sprawling mixed-use projects.
“Motivated by growing tenant demand, developers