The property market in Montreal has become so hot that bidding wars have begun to be a common occurrence.
Whilst bidding wars were often seen in the property markets of Toronto and Vancouver, Canada’s second-largest city of Montreal rarely saw the practice.
However, since foreign buyer legislation was introduced to cool the property markets in Toronto and Vancouver, overseas property investors have moved their interest to Montreal.
This coupled with a very low property inventory and the solid Quebec economy has led to the bidding wars breaking out for attractive real estate.
The Greater Montreal Real Estate Board reported property sales increased in July for their 41st consecutive month, hitting an eight year high for the month.
The median single-family home price rose six per cent compared to the same month a year ago to $336,250 – still much lower than in Canada’s biggest market of Toronto, where the average home price stood at $782,129 in July, indicating that Montreal still has a fair way to go.
The bidding wars situation – in which interest in a property is so strong that sellers can solicit quotes above the asking price from multiple buyers and choose the best offer – is especially strong in Montreal’s West Island, where nearly one quarter of houses sold above the asking price in the second quarter, according to Royal LePage.
Montreal’s last sellers’ market that prompted bidding wars occurred a decade ago, before the financial crisis.
Brad Henderson, CEO of Sotheby’s International, said: ‘Montreal has suffered for a long period of time under sort of a cloud of political uncertainty, but given its stability over the last number of years and the fact that the existing government is not expected to do anything radical, I think that is what has allowed Montreal now to play a bit of catch-up.’
Montreal realtors report that the inflow of overseas property investors that followed the introduction of taxes on them in Toronto and Vancouver have made a difference even if their numbers are relatively small.
It seems that Montreal has certainly taken over the Canadian lead for property growth.