Montreal house-price rise is tops in Canada - Though housing more affordable than Toronto, Vancouver

MONTREAL August 22, 2011 - Montreal had the biggest jump in the average price of a two-storey house in Canada during the second quarter, fuelling a deterioration in affordability in a city once known for its cheap real estate, an RBC report said Monday.

Year over year, the price of a 1,500-square-foot home rose 13.5 per cent in Montreal to $377,200 – a higher rate than in Canada’s sizzling Vancouver market where prices for the same type of house rose 9.7 per cent during the quarter, the RBC report on housing trends and affordability said.

In Quebec, the average price of a two-storey home, while still comparatively low, rose 10 per cent to $291,100, year over year, during the quarter – a higher rate than in any other province.

“The cost of owning a two-storey home in the province is now beginning to pinch households’ budget ... and will likely be a factor for restraining homebuyers in the period ahead,” the report said.

Yet, even as single-family homes are becoming increasingly out-of-reach for buyers in these cities, the affordability of standard condos – the top choice of first-time buyers – remained fairly stable in Montreal and Toronto, where there is a boom in condo construction.

“The supply is such that it’s been fairly easy meeting demand,” he said.

During the last quarter, it took 32.8 per cent of household income to buy an average-price condo in Montreal, compared with 34.2 per cent in Toronto.

In previous quarters, it was actually less affordable to buy a condo in Montreal than in Toronto.

The change, Hogue said, is because of a greater deterioration in affordability in the Toronto market and a revision in data from previous years that underestimated median incomes in Montreal.

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Marlene Ofter

Marlene Ofter

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