With the economy beginning to pick up, many people are looking to move from leasing to owning their own property. These first time home buyers are a key measure of the general state of the property market, and of the trends we can expect to see in the near future. First time buyers are a net asset in property market, as they don’t have an existing home to sell.
Montreal is one of Canada’s largest real estate markets. Its housing demand is assisted by continuing low mortgage rates, positive employment growth, and a rising net migration of people to the city and the surrounding urban area.
Due to the new rules introduced in 2012 on insured mortgages, which reduced the mortgage amortization period from 30 to 25 years, interest rates have risen slightly, but are still quite low, historically speaking. This trend is projected to continue throughout 2013. According to the housing market outlook for Montreal, from the Canada Mortgage and Housing Corporation, supply will continue to outpace demand for housing in 2013, leading to softer market conditions and less growth in sell prices.
Economic activity in Montreal is expected to increase in 2013 to 1.9 per cent growth, which will lead to moderate employment growth in the city and surrounding areas. With a larger job market comes greater competition for employees and an increase in job security, which enables home ownership to become more viable for individuals and families who have been renting or leasing until now.
Net migration in the metro area will continue to stay at historically high levels in 2013. More than three-quarters of newcomers to Canada will settle in the Montreal area, leading to a strong demand for housing that is immediately available. Many immigrants, seeking to establish themselves firmly in Canada, are looking to buy property, as opposed to leasing. The condominium market offer more choice towards potential buyers, as these properties, such as the new Evolo condominiums on Nuns’ Island just south of Montreal, come with an existing urban community to support newcomers to the area. With public transportation nearby and an assortment of local retail shops and restaurants, as well as ready-made access to pools, fitness centers and concierge services, this makes living in a condominium attractive for immigrants and foreigners on work visas. Indeed, investor-owned condominiums resold or leased out is an area reaching critical mass in several major Canadian markets, competing directly with the traditional multi-housing market, which is currently sitting at an extremely low vacancy rate.
With all of these favorable conditions, there is a growing trend among first time home buyers to purchase property away from suburban areas. Instead, they are looking for locations in urban areas, closer to their workplace and urban amenities. With the high cost of commuting and the grassroots movement of shopping at local and small businesses as opposed to big box and chain retailers, buyers are looking more at the surrounding community than just at the property itself. The emerging buyer mindset points towards looking for the perfect home, if you’re going to be making a large investment of time and money, now that the tough times are seemingly past, and the time to build a strong future is upon us.