It could be a very big year for Montreal in 2016, as industry experts predict a “renaissance” within the city’s economy.
For the first time in years, international investors are expected to come calling en mass as the city’s climate for business strengthens.
But it hasn’t always been like this: Montreal hasn’t been neck-and-neck with Toronto in terms of economic rivalry since the 1960 and 70s.
One area expected to improve measurably is foreign investment in real estate.
Particularly in the condo market, the city’s low rate of foreign investors in condos currently lags compared with other, worldly cities.
Despite a lack of accurate and reliable data into how foreign ownership affects the Canadian housing market, the Canadian Mortgage and Housing Corporation (CMHC) recently released a telling report.
The fact is, the rate of foreign ownership in 16 census metropolitan areas in Canada remains low. In Montreal, data revealed that foreign ownership within the downtown core actually fell from 6.9 per cent in 2014 to 4.9 per cent in 2015. In the entire city, just 1.3 per cent of condos are foreign-owned.
But according to economists, real estate experts and housing authorities, Montreal is about to accelerate its economy. And with new players entering the Montreal market, like world-renowned luxury condo firm Engel & Völkers, foreign ownership of condos is expected to rise.
“Now is the right moment to start investing in Montreal,” said Silviu Ion, a consultant with McGill Real Estate and Real Estate Broker with Engel & Völkers. “Montreal brings real advantages, including new investments in construction, the value of our Canadian dollar and our low interest rates. We’re already seeing a trend of investors identifying our city as an opportunity.”
There are some larger signs that point to this ‘renaissance’. Montreal’s economy will have grown by 2.1 per cent by the end of 2015, according to the Conference Board of Canada. In 2016, that figure should climb to 2.3 per cent.
It was also predicted that Montréal’s manufacturing sector will continue to recover this year, with an expected output growth of 2.3 per cent.
“Montréal’s economic outlook is improving. In fact, economic growth over the next two years is expected to outpace the national average, a welcome change for an area whose growth has lagged the Canadian average in 22 of the past 25 years,” said Alan Arcand, Associate Director, Centre for Municipal Studies.
And there’s more.
The Conference Board of Canada’s Senior Vice president Glen Hodgson recently argued in the Globe and Mail that after decades of economic setbacks, Montreal is primed for a healthy rebound.
In the editorial, titled “The welcome economic renaissance of Montreal,” Hodgson referenced a new benchmarking report by the Institut du Quebec and business school HEC Montreal. It compared Montreal’s economic activity, innovation, human capital, quality of life, and business attractiveness or friendliness with other cities.
“GDP growth is positive, disposable income growth is strong and productivity is up, even though building permits have recently tumbled,” wrote Hodgson. “Employment and airport traffic data are consistent with that of other major cities. These generally positive indicators are helping the city recover some lost ground.”
While the city can improve in gross domestic product, disposable income and productivity per capita, the report said Montreal’s undeniable strength is its quality of life, ranking second to Toronto. Montreal offers its residents a safe and high-quality environment, argued Hodgson, placing first in distribution of wealth, with one of the lowest crime rates and a population that uses alternative modes of transportation.
Indeed, the Guardian recently ranked Montreal the sixth-best city to be a student in.
Montreal is rising, say the experts. Like any city it has its room for improvement, and the next step is to drill into specific issues and identify how change can be made. But like Hodgson said, Montreal’s “renaissance” can only benefit from such exercise.
This ship is ready for takeoff. The only question now is which international investors are coming along for the ride.