Newsletter May 2018

Newsletter May 2018 1024 480 Guardian Financing

Welcome to the Guardian Financing May, 2018 monthly newsletter. This month’s issue is on the BoC’s hold on rates, as well as the emergence of Montreal as a hot market.

Bank of Canada Holds Rates, Montreal Market Becoming Hotter

According to the Bank of Canada, interest rates remained unchanged primarily due to “weaker than expected data” during the first quarter of 2018. This cited weaker than expected data is believed to be due to the new mortgage rules that took effect at the beginning of this year and a drop in exports.

For instance, the new stress test, which came into effect at the beginning of the year, caused real estate sales to be brought forward into the last quarter of the previous year.  However, it is expected that the industry will moderate compared to last year, and a partial recovery is also expected in the second quarter of 2018.

Rate Hold is good News to Homeowners

For those with adjustable rate short term loans, the rate hold was actually good news.  This particular group of homeowners have seen their monthly payments take a leap of about $35 every month per $100,000 of mortgages. With the 0.75% increase in rates last summer, the industry saw mortgage costs hit a four-year all-time high.  The hold was therefore a great relief to thousands of homeowners across the country.

The Case of Montreal Becoming a Hot Hot Hot Market

The interest rates may not have changed, but the Montreal real estate market is witnessing new dynamics. It will interest you to note that condo prices in Montreal are up by 2% compared to last year, and almost half of all the units are going for more than $245,350. In April 2018 alone, there were 5432 homes for sale according to the Greater Montreal Real Estate Board. This was an increase of 10% compared to what was recorded one year ago, and it is the highest in nearly a decade.

Rise in demand for condos

One of the reasons attributed to the rebirth of Montreal, is the rise in demand for condos in the area. There has been a particularly high demand for condos, and there is a large number of condo buildings coming up to meet that demand. It has been noticed that condos are no longer appealing to young buyers alone. The number of older people, over the age of 55, looking for condos has increased, as they look forward to downsize from single-family homes. The units are also appealing for professional of all ages, including those with or without kids.

Other economic drivers

The other economic driver believed to be responsible for the renaissance of the Montreal real estate market is the increase in jobs over the last decade. Montreal added more jobs to the economy over the last two years when being compared to the previous eight years, with major international companies opening tech and new data centers in the region. For example, International Business Machine Corp and Inc. are some of the serious employers who have raised the stakes for Montreal.

As it stands now, the demand for real estate in Montreal is still strong, but the number of properties available for sale is still low. Just like any other market, this is the perfect combination to divert all attention to this once forgotten Canadian real estate jewel. As we progress into the year, we can only wait and see how things turn out, though we have a pretty good idea of what to expect. We could be looking at another Toronto-like scenario playing out in Montreal.

Guardian Financing is a direct private mortgage lender. We serve the greater Montreal area providing short term residential mortgage loans, typically ranging from $50,000 to $750,000. Contact us today to discuss your file at 514-700-3121 or by email at