Homes and Condo Mississauga

Montreal's hot real estate market spawns rare phenomenon: bidding wars

The buoyant property market in Montreal has provoked bid wars, a common phenomenon in recent years in the crazy markets of Toronto and Vancouver, but a rare phenomenon in the second largest city in Canada.

A mix of very low stock, a solid The economy of Quebec and the influx of foreign buyers have led to house prices in Greater Montreal rising above the national average for the first time in seven years.

In contrast to mixed performances in the Toronto and Vancouver markets that dominate the headlines, the Montreal market is in a solid upward line.

The property commission of Greater Montreal reports that home sales have increased in July for their 41st consecutive month, with a peak of eight years for the month. The median home price of a single-family home increased by six percent compared to the same month a year ago to $ 336,250 – still much lower than in Canada's largest Toronto market, where the average house price in July was $ 782,129.

The bidding war situation – where the interest in real estate is so strong that sellers can ask quotations above the asking price of multiple buyers and can choose the best offer – is especially strong in the West island of Montreal, where almost a quarter of houses above the asking price on the market sold second quarter, according to Royal LePage.

Sellers on the island of Montreal received a bid of about $ 15,000 or 3.5 percent above the asking price, said Dominic St-Pierre, senior director for Royal LePage in Quebec.

"It's probably going to make it worse before it gets better," he said.

"Demand is still strong and the inventory is still going down and it is likely to continue to fall for another six to nine months before it stabilizes ill."

The threat of further interest rate hikes, new lists and rising new housing construction eventually bringing the market more balanced and relieving some pressure on buyers, he said.

The last seller market in Montreal that led to bidding wars occurred a decade ago, before the financial crisis.

For buyers, bidding wars can be an extremely stressful and expensive process, but for sellers there are enormous opportunities to make money.

Elena Trigiani and her husband, Thomas Poirier, were recently forced to pay 15 percent above asking for a war with six other bidders on top.

"The house was honestly praised for bidding war," said 29-year-old soon to soon be mother.

The two-story house in Pointe-Claire, a suburb of the island, sold $ 60,000 over the asking price of $ 400,000.

The couple braced themselves for the fight after seeing many friends missing at houses because they did not go all-in. [19659002] "We knew we should be able to respond quickly if we knew the house was for us and that's what we did," she said.

Sellers, Megan Mallette-Di Liello and Patrick Vena have the benefits of being on the other side, receiving an additional $ 20,000 when they sold their home at $ 735,000 at nearby Beaconsfield.

The parents of two young children knew from friends that there was a possibility for multiple offers but they did not want to fetch their hope.

"We were certainly satisfied, we did not expect that," she said.

Di Liello had heard of sellers who had deliberately noted at a low price to create a bidding war.

"That was not our intention, we thought what we locked up was fair, and to get that across, we were surprised."

While the property market in Montreal is strong, the level of over-tender pales in comparison with Toronto and Vancouver, where some homes drew dozens of bids in their heyday and sold for $ 100,000 on questions.

That dynamic added buyers and encouraged the loss of bidders to pay more in subsequent sales, said Brad Henderson, CEO of Sotheby & # 39; s International.

"The next bidding of war in which they ended up would be much more determined and that was one of the things that caused the rise in prices," he said in an interview.

Henderson also believes that there are more runways for bidding wars against house prices less than $ 1 million due to the lower prices of houses in Montreal.

"Montreal has long suffered some kind of political uncertainty, but given the stability in recent years and the act that the existing government is not expected to do anything radically, I think that is what Montreal has now allowed To catch up a bit. "

Montreal brokers say the inflow of foreign buyers following the introduction of taxes on those in Toronto and Vancouver have made a difference, even though their numbers are relatively small.

Another factor on the West Island is the lack of housing opportunities for seniors. That convinced baby boomers to stick to their big houses, said Jay Deakin, owner of Deakin Realty.

The volatility has made it difficult to price houses and know what to expect in the coming months, he said.

"I would like to say that we saw all this coming, but most of the brokers I talk to did not see the past 18 months, and we did not expect that kind of increase."

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