The residential real estate market of Montreal is diverse: condominiums, single-family cottages, apartment buildings, townhouses, chalets, and even apart-hotels. And all this is in great demand. According to official statistics, two-thirds of Montreal residents rent housing. In some districts, this figure reaches 73%. Residents of the city form a stable demand for rent, which makes local housing very attractive for investors, including from abroad. But that is not all.
In 2018, more than 100 development projects were launched, many of which were destined to change and decorate the face of the city. For example, Victoria Sur le Parc – a modern office and residential complex that will become the tallest building in Montreal, and MAA Condominiums & Penthouses with its characteristic aristocratic features, and the Royal Mount and Cite Midtown projects launched in November 2018 in the very center of the island.
A Tax On The Purchase Of Real Estate By Non-residents
Since 2017, against the backdrop of the introduction of a tax on the purchase of the real estate by non-residents in Vancouver and Toronto, the demand for properties in Montreal from buyers from overseas has grown significantly. This, in turn, led to a systematic increase in property prices and a significant change in the proportion of supply and demand.
Some experts began to fear a market overheating. Indeed, in some districts of Montreal in 2018, the growth in prices for certain types of real estate reached 30%. But talking about a “bubble” on the real estate market is objectively early. The average cost of housing in the city is several times lower than of the same one in Vancouver – € 406,125 against € 1,353,750 for a single-family house. The growth potential is still great, which means opportunities to earn.
Rental rates are still lagging behind price increases. Today, the yield on rental housing is relatively low – 3-5% per annum. Although, in some individual cases, it can reach 10%. The main prospects are related to the subsequent resale. At the same time, investment in real estate in Canada implies several types of income at the same time: from rent (cash flow), from an increase in market value, from a decrease in debt to the bank if the object is purchased in a mortgage.
Due to the relatively low-interest rates on loans (for foreigners this is 3-4%), a significant decrease in debt has been going on since the first year. This makes it possible to refinance the paid part of the loan and use it as a down payment for the acquisition of another object, that is, replenishment of your investment portfolio.