According to a survey conducted on behalf of the Greater Montreal Real Estate Board (GMREB) at the end of 2003, nearly 213,000 households expect to buy a home in the next five years.
From this amount, roughly 71,000, or 5% of all households, were considering buying in 2004. This trend has proven to be correct because during the 1st quarter of 2004, more than 28,500 properties were sold through the GMREB S.I.A./MLS system.
"These numbers match those obtained in the first survey we conducted in 2001," says Michel Beausejour, FCA, GMREB Chief Executive Officer. "As a result, 2002 was a record year in terms of resale with close to 50,000 transactions. This leads us to believe that 2004 will be another vintage year, probably as good or maybe even better than 2002."
Significant economic and demographic factors
A house represents an important investment for a family; not only as a place to live but also because it reflects one's needs and aspirations. You buy a house initially to improve your quality of life and in due course, to build a positive financial asset.
Did you know that family worth has increased since 2000? The average price of a property in the Greater Montreal area has increased by 50%, which is a sign of healthy growth. What could explain this situation? According to Michel Beausejour, five major factors are in the mix:
1. Interest Rates: They are currently very low, which means easier access to a property. Good news for borrowers, there are no indications of a major interest rate increase in the short or intermediate term.
2. Consumer Confidence: The economy has grown by 18% since 1998. The higher the level of confidence is, the more consumers invest and buy properties. This has a positive influence on the real estate market.
3. Job Creation: Since the end of the nineties, 436,000 jobs have been created, which means that Quebec has known a period of prosperity for six years. When you are employed, you have the means of buying a house.
4. Rental Unit Vacancy Rate: It is presently about 1% (2004) in the Greater Montreal area, which means that few families, who would like to move, can find a vacant apartment that meets their needs. The option left to consider is to buy a house, a plex or a condominium. It is definitely advantageous to trade up from being a renter to a home owner thanks to low interest rates and incentive programs such as the Home Buyers Plan (HBP).
5. The "Generation Shuffle": The baby boomers are reaching retirement age. They are at a stage when they sell the family residence in order to buy a property which better meets their needs. They either buy a condominium or a cottage or . both! At the same time, the 25 to 35 year old generation is entering into the real estate market and is actively looking for a property in order to settle down. The effect is an increasing number of transactions and a growing interest of families in the real estate market.
Is it still time to buy?
"It is still the time, if you make a well-planned purchase," says the GMREB spokesman. He reminds buyers that they must first determine which criteria matter to them, which are negotiable and non-negotiable, in keeping with their budget and with a long-term perspective. |
