Montreal 'severely unaffordable'

[Malek]

Alors pourquoi le prix des maisons au Québec augmente-t-il plus rapidement que les salaires ? Si le prix des maisons augmente, c'est que la demande en maisons augmente !!

 

Plusieurs facteurs qui sont multipliés uns sur l'autre

 

-Salaires qui augmentent (+4.1% au Québec de 2009-2010 : http://lapresseaffaires.cyberpresse.ca/economie/macro-economie/201008/26/01-4309957-le-salaire-hebdomadaire-moyen-atteint-85350-au-canada.php)

-Taux hypohtécaires (très) bas

-Immigration intensifiée

-Retour de beaucoup de québecois à la maison

-Babyboom

[Habsfan]

Il ne faut surtout pas oublier que le Québec avait beaucoup de ratrapage à faire par rapport aux autres villes Canadiennes. Le prix des maisons au Québec était trop bas. Ça prenait un redressement de la situation.

[jesseps]

Rising Montreal housing prices have left young families buying their first home with limited choices in the city, raising the spectre of continued urban sprawl, a report published Tuesday suggests.

 

During January and February, only 89 single-family homes on Montreal Island were listed for $250,000 or less – a price point within the means of local first-time buyers, the report by real-estate services firm RE/MAX said.

 

“Entry-level product in the single-family category is exceedingly scarce,” said the report, which cites Multiple Listing Service (MLS) data. “Those wanting newer single-family product – constructed in the 1980s to 1990s – will spend $300,000-plus.”

 

According to the national RE/MAX report, first-time homebuyers fearing the prospect of higher interest rates this year are driving up the real-estate market in a number of Canadian regions. Led by the Bank of Canada’s relatively low benchmark rate of one per cent, buyers enjoy mortgage rates that are historically low. However, it’s not expected to last.

 

This week, most of Canada’s major banks hiked their mortgage rates, with standard five-year, fixed rates moving up 35 basis points to 5.69 per cent a year.

 

Nationally, home sales are up from where they were at the same time last year in about 30 per cent of Canada’s main markets, with prices rising in 70 per cent of markets.

 

On Montreal Island, the average price of a residential property – including plexes, condos and single family homes – was $354,549 at the end of February, RE/MAX said.

 

During that time, the median price of a single-family home on Montreal Island was $332,000, rising four per cent from $318,000 for the same period a year earlier, data from the Greater Montreal Real Estate Board show.

 

“Purchasers seeking more bang for their buck must look to the peripheral communities on the fringes of the island, or just outside the island where prices tend to be approximately 20 to 30 per cent less,” said the report, which cited areas like Vaudreuil-Soulanges, Mascouche and Terrebonne.

 

Not surprisingly, the population of Vaudreuil-Soulanges, which stretches from Île Perrot to the Ontario border, has seen its population jump 39 per cent in 15 years.

 

Between 2009 and 2010, the city of Montreal lost a net 23,640 residents to the benefit of areas like Laval and Lanaudière, according to data from the Institut de la statistique du Québec.

 

And a Statistics Canada study revealed that between 2001 and 2006, “Almost one-half of all new francophone parents with incomes between $50,000 and $99,999 left the city of Montreal for a surrounding municipality.”

 

Hardly new, this flux to the suburbs is worrisome for Montreal’s already fragile tax base.

 

“We’ve been seeing the phenomenon (movement to the suburbs) since the year 2000,” observed Caroline Salette, a Montreal-area broker with RE/MAX Royal Jordan Inc.

 

But Salette said affordable homes are still available for young families on Montreal Island, in areas like Pierrefonds and Pointe aux Trembles.

 

More options may be available as city officials and even some developers specifically court young families.

 

In 2010, Mayor Gérald Tremblay launched a program giving families up to $15,435 to buy homes if they meet certain criteria.

 

And last month, Accès Condo announced its Verso project in Lachine, targeting families with three-bedroom condominiums starting at $227,900.

 

In the private sector, developer Groupe Prével and partner Conceptions Rachel-Julien will be building around 20 townhouses, priced between $350,000 and $400,000 as part of the first phase of their Bassins du Nouveau Havre project, in southwest Montreal, north of the Lachine Canal.

 

The townhouses, to be located on the ground floor of an eight-storey condo building, would have small backyards.

 

Last month, the developers paid $20 million to Canada Lands for the 200,000-square-foot site, which will be used to develop up to seven phases of an eight-phase, 1,600-unit project.

 

The project is to go on sale in June for delivery in spring 2013.

 

“There’s work to do to keep families in Montreal,” said Jacques Vincent, co-president of Prével. “There aren’t many new townhouses and single-family homes available for families in Montreal.

 

“We think this will be very desirable.”

 

Read more: http://www.montrealgazette.com/life/First+time+buyers+left+cold/4565089/story.html#ixzz1IkiPrwoa

[jesseps]

In 2010, Vancouver had the third-highest housing costs among English-speaking cities worldwide, according to Canada’s Frontier Centre for Public Policy. Only Hong Kong and Sydney, another magnet of Asian immigration, were more expensive. Vancouver’s median home price of C$602,000 ($618,000) was 9.5 times the annual median household income of C$63,100, the group said in a study released Jan. 24. Canada had a 4.6 national multiple, making it “seriously unaffordable,” while the U.S. at 3.3 was “moderately unaffordable,” the study showed. To be affordable, the multiple must be 3 or less.

 

Vancouver was more expensive than San Francisco, London and New York by that measure, the Winnipeg-based center said.

 

“This makes it all the more difficult for people who are already struggling to get into the market or businesses who can’t hire people to come here because of the high housing prices,” said Peter Ladner, a former Vancouver city councillor and a columnist for the Business in Vancouver weekly newspaper. “There are a lot of people who are really frustrated.”

 

Unlike London or New York, “we don’t have enough jobs with high incomes to justify” the home prices, said Ladner. He noted Australia has placed restrictions on foreign home ownership. The British Columbia government also could consider an increase in property transfer taxes for foreigners, he said.

 

(Courtesy of Bloomberg)

 

What I posted above, is a little exert about Vancouver.

 

Results (Demographia International Housing Affordability Survey)

 

Plus the link above only looks at these markets: Australia Metropolitan markets, Canada Metropolitan markets, China , Ireland, Hong Kong Metropolitan markets, New Zealand Markets, United Kingdom Markets and United States Metropolitan markets. So it is leaving out many other majors such as: Mexico and Brazil.

 

It is interesting to see that Honolulu more expensive than New York or any other US city. Houston is one of the most affordable US cities. For Canada it is Vancouver, Montreal and Toronto (from what I can tell).

Modifié 17 mai 2011 par jesseps

[Cyrus]

Vancouver home prices are really nuts, especially since so much of the housing stock is either garbage or located in a really terrible area (and also garbage). And the ones that are nice, and in nice areas, haha don't ask price

 

I think the big problem is just space. There is plenty of developable space in Metro Vancouver but hippies prevent them from developing the areas, so you end up with dense urban pockets, then farms then empty spaces and dense urban areas again. Then of course the geographic situation... Vancouver Island and the other small islands would be ideal to develop except that the water is like 400 metres deep so a bridge is out of the question, and hippies also...

 

Compare to Houston which has basically no geographic barriers to development, no hippies, kickass economy/ high-paying employment, excellent road infrastructure and a volonté to improve / expand the network as the city grows... look at how many ring roads they have

Modifié 17 mai 2011 par Cyrus

[Malek]

Vancouver home prices are really nuts, especially since so much of the housing stock is either garbage or located in a really terrible area (and also garbage). And the ones that are nice, and in nice areas, haha don't ask price

 

I think the big problem is just space. There is plenty of developable space in Metro Vancouver but hippies prevent them from developing the areas, so you end up with dense urban pockets, then farms then empty spaces and dense urban areas again. Then of course the geographic situation... Vancouver Island and the other small islands would be ideal to develop except that the water is like 400 metres deep so a bridge is out of the question, and hippies also...

 

Compare to Houston which has basically no geographic barriers to development, no hippies, kickass economy/ high-paying employment, excellent road infrastructure and a volonté to improve / expand the network as the city grows... look at how many ring roads they have

 

6.1 Million metro!! :drool::openmouth:

[jesseps]

Montreal was oddly missing from this year’s Remax Upper-end Market trends report. The report, which covers January to April, tracks the number of sales of high end homes in all categories.

 

Marc Lacasse, VP communications of Remax Quebec, says the agency kept its Montreal numbers separate this year because it just launched a new high-end division which apparently specializes in the sale of houses worth $750,000 and over (http://www.lacollectionremax.com).

 

Sounds like a pretty flimsy explanation to me. And it’s especially flimsy when you look at last year’s numbers. In 2010, Montreal was quite the vedette in the Re/Max report, with sales of luxury homes soaring 300 per cent from six to 24.

 

Now here’s where it gets interesting. Last year, Re/Max Ontario, which publishes the annual report, defined a luxury home on Montreal Island as $1.5 million and over. That’s the same benchmark the national agency used for the Greater Toronto Area, where prices are significantly more expensive and high net worth individuals are in far greater supply. Oops.

 

In case you’re wondering, they come up with these benchmarks by taking the lowest-priced transaction within the top three per cent of all sales.

 

Lacasse says Re/Max Quebec always used the same price point to define a luxury home in the Greater Montreal Area - $700,000 and over. (Lacasse couldn’t recall the results from last year’s national report.)

 

That’s the exact benchmark used by the Greater Montreal Real Estate Board. According to both Lacasse and the board, sales in Montreal’s luxury market were up seven per cent, year over year. Sales went from 389 transactions during the first four months of 2010 to 417 during the same period this year, the board said.

 

That’s a lot more than the 24 announced by Re/Max in last year’s report. At the same time, Montreal’s luxury market seemed a lot more prestigious when our mansions were being compared to those in Toronto.

 

Now, it seems, luxury is cheaper to buy in Montreal than in Ottawa or Hamilton.

 

(Courtesy of The Montreal Gazette)

[Cyrus]

Vancouver housing testing 'rationality'

With the spectre of rising interest rates on the horizon, owning a home in Canada became less affordable in the first quarter of 2011, according to an RBC Economics Research report released Friday

 

Steve Bosch/Vancouver Sun

 

With the spectre of rising interest rates on the horizon, owning a home in Canada became less affordable in the first quarter of 2011, according to an RBC Economics Research report released Friday

 

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Christine Dobby, Financial Post · May 20, 2011 | Last Updated: May 20, 2011 10:15 AM ET

 

With the spectre of rising interest rates on the horizon, owning a home in Canada became less affordable in the first quarter of 2011, according to an RBC Economics Research report released Friday.

 

The cost of carrying a home surged in Vancouver and is now “testing the boundaries of rationality” due to significant gains in property values, while Quebec also saw a notable rise in the price of ownership and even Atlantic Canada’s typical advantage when it comes to the cost of owning a home diminished, the report said.

 

“We fear that the Vancouver market is becoming increasingly disconnected from local demand conditions and vulnerable to a painful correction, especially once interest rates resume their ascent,” said Robert Hogue, senior economist with RBC and author of the report.

 

The primary reason for the erosion of affordability, after two straight quarters of improvements in the second half of 2010, were rising home prices in the majority of key markets, said Mr. Hogue, senior economist with RBC.

Homeowners put 72.1% of their pre-tax income toward homeownership costs, including mortgage payments, utilities and property taxes on a typical detached bungalow in Vancouver during the three months ended March 31, 2011. That was up 3.4 percentage points from the last quarter. Toronto’s affordability index came in at 47.5% (up 0.8 of a percentage point), Ottawa stood at 39.0% (up 0.4 of a percentage point), Calgary was at 35.9% (up 0.9 of a percentage point), and Edmonton at 31.5% (up 0.5 of a percentage point). Montreal is now also losing its affordability status, with home ownership costs up 2.0 percentage points to 43.1% in the quarter, the report said.

 

Flat mortgage rates were a neutral factor this quarter but Mr. Hogue said hikes from the Bank of Canada as it begins its expected campaign to normalize the overnight rate in the coming months are likely to adversely affect housing affordability.

 

“Interest rates will likely soon start to rise again, leading to a period of steady increases in homeownership costs. This, in turn, will contribute to a flattening in Canadian housing demand going forward,” he said.

 

However, he did note that continued growth in household incomes is likely to temper the effect of rising rates.

 

The RBC Housing Trends and Affordability report measures affordability based on the cost of owning a detached bungalow, considered a reasonable benchmark for the Canadian housing market. An affordability reading of 50% means home ownership costs make up more than half of a household’s monthly pre-tax income.

 

The detached bungalow benchmark for the country as a whole was at 40.5%, up 0.7 of a percentage point from the last quarter of 2010. RBC also tracks the affordability of the standard two-storey home and condominium, which came in at 46.2% and 27.7% respectively, both up 0.2 of a percentage point.

 

The primary reason for the erosion of affordability, after two straight quarters of improvements in the second half of 2010, were rising home prices in the majority of key markets, said Robert Hogue, senior economist with RBC.

 

Flat mortgage rates were a neutral factor this quarter but Mr. Hogue said hikes from the Bank of Canada as it begins its expected campaign to normalize the overnight rate in the coming months are likely to adversely affect housing affordability.

 

“Interest rates will likely soon start to rise again, leading to a period of steady increases in homeownership costs. This, in turn, will contribute to a flattening in Canadian housing demand going forward,” he said.

 

However, he did note that continued growth in household incomes is likely to temper the effect of rising rates.

 

The RBC Housing Trends and Affordability report measures affordability based on the cost of owning a detached bungalow, considered a reasonable benchmark for the Canadian housing market. An affordability reading of 50% means home ownership costs make up more than half of a household’s monthly pre-tax income.

 

For the three months ending March 31, 2011, the affordability measure for Vancouver was a whopping 72.1%, up 3.4 percentage points from the last quarter. Toronto came in at 47.5% (up 0.8 of a percentage point), Ottawa at 39.0% (up 0.4 of a percentage point), Calgary at 35.9% (up 0.9 of a percentage point), and Edmonton at 31.5% (up 0.5 of a percentage point).

 

The detached bungalow benchmark for the country as a whole was at 40.5%, up 0.7 of a percentage point from the last quarter of 2010. RBC also tracks the affordability of the standard two-storey home and condominium, which came in at 46.2% and 27.7% respectively, both up 0.2 of a percentage point.

 

72.1% pre-tax, and tax is 50 % where does the rest go

[jesseps]

TD Economics predicts that home prices across Canada by 2013, will drop by 10.2%. They predict that the Montreal area will see a drop between 7% and 8%.

 

Article

[LindbergMTL]

Ouch! Pas catastrophique, mais...