Homes on the Island of Montreal remain out of reach as real estate market remains for the sellers
Jacques Leclerc moved to Montreal from Detroit in 2019 with a simple plan.
He and his fiance Emily Ciccia planned to rent for a year and then buy a place with a 20 per cent down payment in Montreal.
It's 2022, and the couple is still renting in Pierrefonds, frustrated, and starting to think a house purchase is not going to happen.
"Honestly, I never think we'll be able to afford anything on the island, not at this rate," said Leclerc.
ISLAND OF MONTREAL OUT OF REACH
The couple recently put in a bid over asking price on a house in St. Lazare, but they were outbid. It was a result they had already experienced a number of times on the island and were now having to deal with in the suburbs.
Leclerc is one among many potential home buyers seeing record increases in house prices influence where they can afford to purchase, if they can at all.
Royal LePage's recent House Price Survey for the Greater Montreal Area showed almost a 20 per cent increase in the aggregate house price, which is now $532,600.
The median price for a single-family detached home also increased by 20 per cent and is $595,500, while a condo's median price is $428,900 (up 18.2 per cent).
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The company expects prices to continue to increase in 2022 due to a shortage of housing and continuing demand.
Royal LePage general manager Georges Gaucher said Montreal is seeing what Vancouver and Toronto have been witnessing for decades.
Montreal is about 40 per cent of Vancouver's prices and 44 per cent of Toronto.
"We were historically behind," said Gaucher.
Gaucher said with Quebec's improved economy and job opportunities, investors entered the market ready to buy. The pandemic has added to the price increase causing buyers to go farther afield to find a place, a new trend.
"What we were not used to is going out really far away into the suburbs or cottage country to get a first house," said Gaucher. "That is something that is unknown in Montreal."
In addition, areas once considered less attractive - Hochelaga-Maisonneuve, East Montreal, Rosemont, North Montreal - are being looked at.
The situation is exactly what happened to Leclerc and Ciccia. The couple wanted to purchase on island, but are resigned to the fact that it might not be possible.
The house in St. Lazare the couple was outbid on needed a new roof, water heater and other repairs and they still could not meet the price someone else offered.
"What I want to know is who's buying these houses way over asking price?" said Leclerc.
At the rate the market is going, the couple, who both have decent paying jobs with no children or other major financial obligations, feels they are in a race in which they can't keep pace.
"Either like I need to be able to just borrow money I'll never be able to pay back to buy this house or like I need a government subsidy to purchase this," said Leclerc. "The cost of everything now, it's like I'll never be able to catch up at this rate."
Gaucher said the conditions in 2022 are the same as in 2021.
"Where we have this explosion of buyers," he said. "Jobs, interest rates, which brings consumer confidence, and then the flexibility of working from home. These were three major elements that created the market last year."
In addition, Gaucher said the trend of empty nesters selling their houses and moving to a condo or seniors' residence did not continue during the pandemic.
"People were scared of doing that, so that didn't happen," said Gaucher.
Even with the expected interest rate hike in 2022, real estate agents feel the market will remain a sellers' market.
"There's a lot of pent-up demand out there," said Gaucher. "The problem we have is inventory, and we've known that for years and years."