You’ve probably noticed that Montreal is full of condos, with new projects popping up what seems like every other day. From the outside, all this development seems promising, that the economy must be healthy with so much investment. The truth is, Canada is actually overbuilding condos, and Montreal is one of the biggest culprits.
According to Marc Pinsonneault, a senior economist with the National Bank of Canada, even though Toronto, Vancouver and Calgary, Canada’s three hottest real estate markets, have shown the largest condo growth in recent years, supply in those cities has managed to keep up with demand. Not the same case in Montreal, unfortunately, where increased foreign investment and poor ownership statistics have got many experts fearing an overall market crash for Montreal in 2015.
On another note, check out this very positive construction project that may create 15, 000 jobs in Montreal! The RoyalMount $1.7 Billion Mega Mall To Compete With The Dix30 Shopping Centres?
The Canada Mortgage and Housing Corporation recently released a report that helps shed some light on who actually owns all these developments going up and found that 6.9% of the condos in Montreal’s downtown core and Nun’s Island area are foreign owned, which is Canada’s highest concentration. That in itself is not necessarily problematic, but the possibility of non-residents suddenly selling-off their condos if markets turn, and the fact that condo vacancy rates are at a 3.4% high in Montreal, could possibly trigger a collapse in the sector.
Bear in mind that these stats only include investor-owned condos, specifically meant for rental, and in that regard, Quebec still has the lowest average rental price for a two-bedroom condominium apartment at $1,070.
For a visual representation of just how much Montreal’s landscape has dramatically evolved over the last few years because of condo development, check out these time-lapse slides we obtained courtesy of point2homes.com.