MONTREAL — Record-high presales of downtown Montreal condos in 2012 are unlikely to become an industry “norm,” with developers urged to scale back their launch of new towers this year, a new survey by Altus Group says.
“We hope to see fewer projects (launched) in 2013 than in 2012,” said Mathieu Collette, director, condominium market study division at Altus Group’s Montreal office. “It would be healthy for the market to slow down in 2013 to allow time for developers to sell units available at this time.”
During the first three months of 2013, the number of downtown condo units for sale rose 20 per cent compared with the same quarter in 2012, according to the group’s first quarterly survey of Montreal’s new downtown condo towers. The survey covers all new condo projects with at least five storeys in the area ranging from Atwater Ave. in the west to Papineau Ave. in the east, along with Old Montreal and Griffintown.
The majority of condos are being built and purchased in Griffintown and in western downtown, from Atwater Ave. to Aylmer St.
Collette said demand for new downtown condos remains strong at a time when Greater Montreal housing starts are expected to decline by 19 per cent between 2012 and 2014, as the resale market softens, before bouncing back next year, according to an outlook published this week by Canada Mortgage and Housing Corp.
In downtown Montreal, 61 per cent of the 7,700 condos being marketed in 56 projects during the first quarter have already been sold, the Altus survey shows.
Of those, 26 are now under construction because buyers have purchased 70 per cent of the 3,000-unit inventory, while the remaining nine have already been built.
“It’s a very good sign for the market,” Collette said of the level of presales. “There are certain projects that haven’t reached this level and, in our view, might not go ahead, or will go ahead but not right away.”
Collette noted that sales vary widely from one project to the next and “certain concepts seem to sell at a slower pace.” He declined to specify which “concepts” translated into higher, or weaker sales.
In 2012, 2,657 condo units were sold in downtown Montreal, up 108 per cent from 2011.
Last year’s figures, he said, were bolstered by buyers purchasing 980 condos from the four planned residential towers near the Bell Centre, with the Tour des Canadiens selling around 550 units alone.
Unless developers move forward with another 26 projects this year — five have been launched so far in 2013 — Collette said he expects the remaining downtown condos to be sold during the two or three years when the buildings are under construction.
“We have a lot of time ahead.”