Tim Zyto, owner of Montauk Sofa, located on a trendy strip of Saint-Laurent Boulevard south of Prince Arthur Street in Montreal, noticed that sales had increased just months after the COVID-19 pandemic began.
“In 2020 things started to get busy. In the middle of 2020 things started to get busier,” he said. “COVID hit and people were shocked, but then they started adjusting, and people have more money available that they’re not spending on travel, so they’re spending it on a new house, on things. furniture, swimming pools or landscaping.”
Zyto, which launched its minimalist sofa brand in 1995 and has since opened branches across North America, added that it hasn’t been this busy in years.
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Unsurprisingly, this coincides with the blaze of real estate activity in the Quebec metropolis. Although Montreal’s real estate market began to take off about five years ago when it posted its lowest unemployment numbers in decades, activity hit a fever pitch during the COVID-19 pandemic, and even the province’s two curfews haven’t stopped people from buying homes.
“COVID has been good for furniture companies,” said Martin Rouleau, a broker with Engel & Volkers. “People are spending more time at home and they are investing in their homes. Entrepreneurs also renovate their homes, their kitchens, their bathrooms, their fireplaces, so it’s about the comfort of their homes. As people spend more time in their homes, they realize that their properties are not meeting their needs. COVID has been good for real estate because people aren’t spending money on travel, they’re not spending money on clothes or restaurants, so they’re investing in their homes.
Demand in the Montreal real estate market is strongest for single-family homes, sales of which fell 12% in 2021 to 26,529 from 30,129 a year earlier, according to figures from the Professional Association of Quebec Real Estate Brokers. However, this appears to be a function of fewer listings, which fell 39% to 3,861 from 6,289 over the same period, driving prices up 24% from $400,000 to $495,000. $.
“Certain pockets of Montreal are doing better than others. Obviously, home sales on the outskirts of town in the suburbs are doing very, very well,” Rouleau said. “Downtown condos still work well, but not as well as single-family homes on the outskirts. More and more, people are working from home, so they are willing to work outside the city center and they are telecommuting. The market is on fire. »
However, selling a home for renovation, regardless of demand from single-detached homes in Greater Montreal, is difficult due to persistent backlogs in the home renovation market. Additionally, a confluence of supply chain issues, which led to inflationary prices, and demand far exceeding the ability of contractors to take on more work, put upward pressure on prices.
“It’s very expensive to do renovations during COVID, so people are looking for turnkey homes,” Rouleau said. “Homes that are gut works may be cheaper during this time of COVID, where the cost of materials is high and finding workers is extremely difficult, but some buyers are underestimating the cost of renovations until they do the actual work these days. In a perfect, perfect world, they buy homes that have all the major components in good working order and they only have a little cosmetic work to do. For example, I have to redo the roof of my house and it is impossible to find someone to give me an estimate.
Rouleau says locals are driving demand for housing in Montreal and there are fewer foreigners and Chinese buyers, the latter of whom have taken a liking to Montreal in recent years following the introduction of taxes on foreign buyers in Vancouver and Toronto than there were before the pandemic. There is also no doubt that the lowest interest rates play an outsized role.
But prices can only go so high before they start to decelerate. Rouleau expects prices to rise again in 2022, but not as much as they did to close out 2021.
“We’re going to hit record prices again this year, that’s for sure, because there’s no sign of it slowing down – absolutely not,” he said. “The increases won’t be as big in 2022, but we will still see increases.”
Neil covered housing and real estate for several years as a Toronto-based journalist. Prior to joining STOREYS, he was a regular contributor to the Toronto Star, Toronto Sun, National Post, Vice, Canadian Real Estate Wealth and several other publications. Do you have a real estate history? Email him at [email protected]
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