A “Sharp” Deterioration in Real Estate Access in Greater Montreal

While Greater Montreal should welcome 243,000 new households by 2041, access to real estate is becoming increasingly difficult.

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This is according to Portrait de l’habitation, a report just published by the Montreal Metropolitan Community (CMM), which includes 82 municipalities in the Greater Montreal region.

“In the current context, with the shortage and the need to optimize the available space without affecting the natural and agricultural environments, it is imperative to properly plan housing development,” said Montreal Mayor Valérie Plante , who is also president of MWC.

The report notes that the rise in real estate prices started to accelerate around 2017, reaching record highs during the pandemic period. Greater Montreal is said to be one of the North American regions most affected by the phenomenon.

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The report finds that there have been “too few” homes for sale compared to demand since 2017. For 2021, it would have taken between “24,000 and 32,000 additional homes for sale to achieve a balanced ratio of 8 to 10 sellers per buyer,” the share currently stands at 2.4.

On the island of Montreal, the median sales price of single-family homes has risen 71% over the past five years to $722,500.

“By 2021, for all practical purposes, renter households in the region earning $59,000 or less per year will not be able to purchase a single-family home affordable to them on the island of Montreal,” the report said.

“Even for a household with an income of $100,000 – so that would be in the top 20% of tenant households – [seulement] 30% of homes for sale on the island of Montreal can be considered affordable,” he noted.

The median cost of condominiums also rose 47% in the Montreal metropolitan area, to $431,500.

“Still on the island of Montreal, no category of condominiums is affordable for a household making less than $48,000,” we read.

CMM analysis shows that house prices have increased by 90% since 2011, while household income has only increased by 40% over the same period.

According to the CMM, it is becoming increasingly difficult for households earning less than $50,000 a year to find a home without spending more than 30% of their gross income on rent.

“The rapid rise in rental costs has weakened the economic situation of many households in Greater Montreal and the general increase in housing costs could have an impact on the attractiveness of the region,” the report warns.

More than a third of tenant households in the CMM have to pay more than 30% of their salary to pay the rent, and about 15% have to spend more than 50% of their income on it.

Several houses have been built in the past two years. However, the rent for a two-bedroom unit is around $1,500, while it’s more like $930 for the rest of the rental market.

“A direct consequence of the lack of affordable housing is that many low-income households are forced to live in poorly maintained, even unsanitary, homes,” the report said, but noted that “little data is available on housing remediation.” .

By 2041, the Greater Montreal territory should have 243,000 new households, according to forecasts conducted by the CMM with the Institute of Statistics of Quebec (ISQ).

“Expected growth mainly based on international immigration in the central sectors and on intra-urban migration in the crowns,” is specified.

The report notes that many households who have lived part of their lives as young adults in Montreal “tend to migrate to more remote areas for the specific purpose of accessing real estate.

However, these are being replaced by new households, mainly through immigration.

The result of these various movements makes the island of Montreal the sector of the CMM that “is experiencing the strongest demographic growth in absolute numbers”.

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