The infamous coronavirus has affected every industry worldwide, the large majority in a negative manner. Montreal’s real estate market has proven itself to be immune to the pandemic, surpassing the expectations of most market observers. The first wave “lockdown” occurred during the mythical spring market, a time when many sellers sellers list their home, hoping to maximize their return. The uncertainty experienced amongst all of us during the lockdown led to the loss of the spring market, causing pent-up demand, which explained the busiest summer market in recent history. But the story continues from there, as the market strength has continued through the fall and into early winter. With inventory levels remaining low, we are predicting the strong market to continue locally through the first half of 2021.

The bull market has been seen through all price points, but perhaps none more profoundly than the higher end of the market. Our firm specializes in the south-west corridor of the West Island, where we have seen sales over $1 million double this year. Sales over $2 million have more than tripled in the same period. The most common definition of luxury real estate is homes valued in the top 10% of the properties on the local market. A year ago, that represented homes priced at $1M for the municipalities we primarily serve (Pointe-Claire, Beaconsfield, Baie-D’Urfé, Senneville). This year, a “luxury” price point starts at $1.25M, meaning the selling price to enter this top 10 tier has gone up 25% since last year.

One of the key drivers behind this appreciation is the fact that interest rates remain at a historic low. Rates on a 5 year fixed mortgage, the gold standard for most Canadians, are well under 2%. These reduced borrowing costs, combined with a general lack of supply, are allowing and encouraging buyers to increase their property search to higher price points.

Interest rates are only part of the story. The pandemic has forced us to spend much more time living and working at home. This makes it increasingly important to maximize the use and enjoyment of our space. Many have also realized a growing savings account since spending on travel, dining, and entertainment hasn’t been a possibility (one recent study showed that household savings rates are up 10% this year). These increased savings, combined with a higher importance being placed on quality of living space, has played a significant role in homeowners looking to renovate or upgrade. Locally, we are also seeing the trend to flee tight living quarters in the city and live a more suburban life. This also directly contributes to the West Island housing market’s attractiveness.

Our local market has never been hotter and as of yet there are no signs of cooling as we head into 2021. If you are looking to sell, you are well positioned. If you are in the market to buy, be prepared for competition. With market dynamics changing week to week, it’s more important than ever to work with an expert who has in-depth knowledge and local market intelligence.