Yesterday morning was the CMHC/Les Affaires conference on The housing market (available in French only) in the Montreal area.

I have been attending this conference for many years and each time, I like the analysis that CMHC economists do based on the sales data of real estate brokers in Montreal. I am close to the action: the brokers in my agency have been helping our clients sell or purchase tens of thousands of homes for many years. It is always interesting to see these sales as a whole, with the hindsight and purely economical perspective of economic analysts.

Here are the highlights of the conference

  • Fundamental factors are strong, resulting from the current strength of the market.
  • Job creation, interest rates remain low, population growth is very strong, consumer confidence is high, in short, everything is in place for Montrealers to be inclined to buy a property.
  • Prices will continue to rise in 2020 and 2021: Predictions of 5% per year.
  • Montreal, which had traditionally had a net migration of 19,000 people for years, saw it jump to 78,000 in 2018 and 80,000 in 2019.

The household debt ratio in Canada

  • Montreal 162%.
  • Toronto: 208%.
  • Vancouver: 232%.

When we compare ourselves, we are comforted! However, Montrealers have debts other than mortgages, unlike the rest of Canada. So, caution in consumer spending!

CMHC considers that the market is “green” (therefore fluid, Go) and not “red” (Attention, stop) for 3 reasons

  1. The acceleration of prices is correct
  2. There is not too much overvaluation on the market (speculation)
  3. There is no overbuilding. However, there are signs of overheating that we will have to monitor closely.

For the current year, home sales by real estate brokers to the MLS system totalled 37,000 ! This figure is expected to reach 50,000 by December 31, 2019. A very strong increase compared to the last few decades.

And it’s going to continue! Here are the CMHC forecasts: 2020: between 47,000 and 53,000 MLS 2021 sales: between 47,000 and 54,000 MLS sales

Why are there fewer homes for sale?

Strong demand from buyers. The flow is fast. Fewer new buildings.

Households that already have a home are afraid to move because they don’t know if they will find the desired new home after selling, given the limited number of homes available on the market.

Interestingly, there is a misperception of the impact of foreign investors on the market by the Montreal population:

According to CMHC data, there are only 2% of non-resident buyers in Montreal and they are concentrated in the downtown area.

CMHC conducted a survey of home buyers in 2018. To the question “what do you think are the factors that influence prices a LOT”, here is what Montrealers answered:

  • Employment and population: 30%.
  • Scarcity of supply: 43%.
  • Foreign investors: 52%.

So, between perception and reality, things are not always what they seem to be.

These forecasts confirm that the Montreal real estate market appears to be on the right track for the next two years.


Nathalie Clément
Director, Via Capitale Du Mont-Royal