MONTREAL April 8, 2013 - Greater Montreal's condo market now favours buyers for the first time in 15 years, after the number of units listed for sale soared 25 per cent in March compared to the same month in 2012, the Greater Montreal Real Estate Board said Monday.
"Market conditions for condominiums have been relaxing quickly in recent months," said Diane Ménard, vice-president of the GMREB board of directors, in a release. "In early 2012, the condominium market still (favoured) sellers slightly, but after a short period in balanced territory the condominium market is now a buyer's market, both on the Island of Montreal and in the suburbs."
Buyers can now choose from 12,623 condos listed for sale in Montreal - nearly double the number of condo apartments and townhouses listed in Canada's largest real estate market, Greater Toronto - data from both real estate boards show. Montreal, however, has historically had a larger number of condos and homes in all categories for sale at a given time than in Toronto, five years of real estate board data compiled by analyst Ben Rabidoux show.
In Greater Montreal, where the number of total properties for sale has grown by more than 40 per cent over three years to nearly 33,000 in March, some analysts and real estate agencies are forecasting a three to five per cent price drop in 2013.
Since August, the price of a Montreal home has declined 2.1 per cent, according to the Teranet - National Bank House Price Index, senior economist Marc Pinsonneault said. Montreal home prices, however, are still up two per cent over 2012, the Teranet index showed in February.
The real estate industry continues to blame the federal government's July tightening of rules governing insured mortgages for the slowdown in Canada's major markets - Greater Montreal resales were down by 17 per cent last month compared to an especially strong March in 2012.
What's more, Montreal real estate brokers point to a reluctance by sellers to lower their prices to meet demand in a slowing market, where buyers are no longer rushed by the fear of missing out on low interest rates.
In its latest quarterly outlook, national real estate services firm Royal LePage said last week it expects Montreal condo prices to drop by up to five per cent during the spring home-buying season, as impatient sellers finally agree to bargain with buyers after months of slowing sales.
"Gone are the days of fishing," said Montreal real estate broker Carly Fridman, in reference to the practice of listing properties at inflated prices with the hope of catching an eager buyer. "You can still make money by selling your house. The market is not collapsing by any means.
"But you have to be competitively priced to sell. They (sellers) really have to start listening to the market."
Fridman said buyers - especially those who are looking for a condominium - are no longer as motivated to purchase a home quickly as they were in 2011 when the market was fueled by the allure of rock-bottom rates.
"Interest rates aren't going up, and if they do go up, they're rising very slowly," she said. "Many buyers are still buying, but they're not in a rush. They want the right price. They're being picky because they can."
In Greater Montreal, total sales for all types of property were down 18 per cent during the first quarter of 2013, compared to an exceptionally strong first three months of 2012. The median price for a condo on Greater Montreal was flat at $220,000 during the first quarter, while it dipped two per cent on Montreal Island to $255,000.
Prices of single family homes - that market remains balanced in Greater Montreal - grew one per cent during the first quarter of 2013, while rising three per cent on Montreal Island.