This past week I attended an RBC breakfast presentation. There were two important Guest Speakers who talked about the Quebec and Canadian Economic and Real Estate Market.
The first guest was representing CMHC. He talked about Real Estate sales statistics, what type of market we are in and forecasted what will be happening in 2011.
The second presentation was from Dave Richardson, VP of Global Financial Services. He talked about the Canadian market, our current situation and gave his predictions for 2011.
CANADIAN MARKET UPDATE
Dave Richardson, VP of Global Financial Services. and some of his future predictions and thoughts on the market:
These are some of his quotes: “We are not going to see a dramatic increase in interest rates like most people expect.” -referring to the next couple of years.
“Quebec market had a modest, stable, increase.” -referring to the last 10 years of real estate sales explaining that it wasn’t a bubble like the US had.
“2009-2010, stock markets nearly doubled in the US and in Canada.”
“There is more money sitting aside in cash now more than we’ve ever seen.” -talking about how people are still nervous over the Dec 2001-June 2009 drop in market, which he refers to “the biggest setback since the depression.”
MONTREAL MARKET UPDATE
March 2011 on the Island of Montreal, we are in a Sellers Market and some areas a Balanced Market (how do I know?). Looking at the statistics, the average days on the market has shortened, there is less product, multiple offers and the price is still increasing. For revenue properties, the banks are using economic value formulas and not market value formulas for determining the value, which reflects the high prices.
TYPES OF MARKETS
Balanced market: Paying market value based on sold comparables- win/win situation.
Sellers Market: Lack of product and multiple offers will drive the prices up.
Buyer’s Market: We haven’t seen for a while, lots of product, very negotiable, prices coming down or staying stable.
WHERE TO FIND REAL ESTATE
- Ask your realtor to pull up old listings that have been sitting on the market
- Online, newspaper FSBO
- Notary, lawyers
[tube] http://www.youtube.com/watch?v=YuH7KOLwxts[/tube]
WHERE TO FIND OWNERS
- Become a member of www.teela.ca. Teela Québec offers a register of all sales reported to the Québec Land Registry Department since 1986.
- Find the owners of apartments through Access Montreal
- http://www.registrefoncier.gouv.qc.ca/Sirf/
- https://servicesenligne.ville.montreal.qc.ca/sel/CitePlus/english.html
REPOSSESSION
I’ve seen well over 100 of them and these are my thoughts:
There is not a lot on market. As of today, March 8, 2011 for the whole island of Montreal:
REVENUE: 18 repos out of 2056
HOMES: 7 repos out of 2573
CONDOS: 15 repos out of 5915 (.00254%)
- Agents are at the front door selling – they will list it at market value
- A LOT of multiple offers – ends up selling way over asking
- Usually sells within a week unless it’s over priced (banks don’t usually negotiate more than 10% I was told by an investor friend of mine who charted this for a year)
- You can’t get your offer in before the crowd. Banks ask that the offer be left open from 3-7 days
HOT AREA – FINDING THE TRENDS
Watch the areas: Growth and decline (vacancy for both businesses and apartments), construction, new businesses, new development, new transportation. (Watch out for new condo development!!!, only because one building is going up, doesn’t mean that the promoters did any marketing research)
Look for the next frontier: Is there a town that is on the outskirts and still at low prices? Keep your eyes on that, people won’t mind driving that extra 5-10 minutes to save $30K-$50K on housing prices.
Look for areas surrounded by big growth: For example, a couple of years ago you could buy a 3 bedroom bungalow in CSL West for under $300K, in a matter of 6 months, most of that area went up about $60K. Why? Because it was the only place left to find those prices in a nice residential area that was still close to town.
KNOW IF THE MARKET IS NEW, HOT OR PAST
Examples:
Lachine Canal:
#1. new dev area,
#2. Lachine market 18th ave hot,
#3. still growing
NDG New Hospital:
#1. new project, (will bring in lots of weekly renters),
#2. not hot yet
Monkland Village:
#1. new duplexes turning to condos, trendy biz move to street,
#2. hot prices more than doubled from 2001-2004. 2001: low $71K- high$473K, 2004: low$170K- high$656K (2010 to present low $260K- high$925K
#3. still growing
