Montreal condo prices decline in August2
Montreal condo prices decline in August
MONTREAL – Greater Montreal Area condo prices declined in August for the first time since 2008, suggesting tougher mortgage rules and a rise in inventory are cooling the once-scorching real estate sector.
Year over year, median condo prices declined one per cent from $227,000 to $224,500 in August, the first drop since December 2008, the Greater Montreal Real Estate Board said Monday. Greater Montreal sales in all housing categories also dropped seven per cent, year over year, for the first decline in 15 months.
Analysts said August’s weak numbers are indicative of a soft landing on prices, which was long due for the market. While a one-per-cent drop seems nominal, price declines are rare in the Montreal real-estate market and usually occur during periods of recession.
“I think we’re seeing a market that’s slowing down and that’s not necessarily a bad thing,” said National Bank economist Marc Pinsonneault. “It’s better that the developers recognize that prices are beginning to stabilize.
“Better that it happens this way than with a precipitous decline of 30 per cent.”
The Greater Montreal Real Estate Board suggested weaker sales could be the result of the federal government’s tougher rules on CMHC-based mortgages, which came into force in July. In August, home resales also dropped in Toronto by more than 12 per cent and by almost 31 per cent in Vancouver.
On Montreal Island, August sales in all categories dropped five per cent, year over year, with condominiums taking a 10-per-cent drop. Median condo prices declined by one per cent from $271,585 to $269,500.
Only sales of single-family homes on Montreal Island continued to rise, growing two per cent in August. Median prices of single family homes rose six per cent to $382,000, up from $360,000 in August 2011.