Excerpts from an interview conducted in August 2012, between the real estate broker Patrice Groleau, owner at McGill real estate real estate agency, condo specialist in Montreal and international journalists on the situation of the real estate and condo in Montreal. McGill Real Estate is the largest real etate estate agency in Quebec that specializes in the sale and marketing of real estate condo projects in Montreal.
Will a referendum have an impact on Montreal’s real estate and condo markets?
It’s a question everyone is asking me right now. My theory on the subject is that there is no right or wrong answer. Real estate relates to a collective wealth, to the strength of the economy. Therefore, if a referendum improves the economical pace, this collective wealth, then real estate itself should follow this trend. The same way, if a referendum or the fact of becoming a sovereign nation impoverishes us or weakens the strength of our economy then real estate will face the same setbacks.
Are there too many condos in Montreal?
Here’s a question everyone would like to answer. I will give you my take on the matter. Are there too many condos in Montreal? To a certain extent yes but the nuances have to be explained. First, it has to be understood that Montreal is currently undergoing a real estate boom especially in regards to condos. And, this is a first. What happens when faced with such a boom, some people want to benefit from it. Some people pretend claim they are contractors, developers. Today’s game is all about marketing, the quality of a sales team, architects and such. The small developers have great difficulties surrounding themselves adequately. My theory is that the bigger players are going to become even bigger. Why? Because they have the funds, they are capable of being funded, they have quality contractors, and they are going to be able to keep up with the blazing hikes in prices in terms of marketing and publicity. Based on this, I sincerely believe that some projects will not see the light; some projects maybe even go out of business. Does that mean that the market will be inundated by condos? I don’t think so. Obviously in Quebec, more specifically in Montreal, financing plays a role in the later stages of a project; when the project is actually well advanced in terms of the sales velocity. Evidently, if there are no sales, there is no construction. This being said, I do not believe that the market will be inundated by an overabundance of condos. However, today, people should wisely choose the developer, the project, and its location, opt for quality and the projects will certainly see the light, the sales are there to prove it. The market is certainly strong. Montreal is still living its glory days it terms of co-ownership.
Are condo prices going to go down in Montreal?
Personally, I don’t think that prices will go down in terms of real estate, especially not when it comes to condos in Montreal. I’ve been hearing several journalists; economists talk about this for years. According to them, by now we would have seen a steady drop for the past 20 years. One thing is for sure, is that the strong hike in condos prices is over. For the next year, I foresee practically no increases or very little mostly related to the cost of living. Personally, I believe that the market is going to self-regulate, the small developers that will not be able to attain certain presale quotas will simply abandon. The developers who had subsequent phases will simply postpone activities. Clearly, it’s still a question of supply and demand. The demand is still present, and if the supply adjusts itself accordingly, then there is no reason for the prices not to maintain a steady pace. It should be mentioned again that Montreal in itself, in reality, is an island. Montreal is a bigger version of Manhattan. Its natural rarity sets limitations in terms of property. Unused plants, green spaces in close proximity to Downtown Montreal are close to nil. I consider the Montreal market as the healthiest currently in Canada even maybe in North America. As a person from Quebec, this is great news. It’s still a good time to invest in real estate. It’s just a question of being more selective as to which project we invest in today.