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Our latest Housing Market Insight report explores quick resales in the overheating Montréal real estate market. It presents an analysis of the evolution of reselling within a 12-month period, from January 2016 to the first quarter of 2021.
Quick resales may be attributable to the fact that some households must sell their property for family or professional reasons. They may also be done by people who want to realize a quick financial gain.
In the context of this report, the gains associated with quick resales only take into consideration the difference between:
- the price at the time of the initial purchase
- the price at the time of the resale
All the costs related to the transaction or ownership of the unit are not taken into account.
Quick resales can increase competition for households who want to buy a home to live in, putting pressure on prices and affordability. In the case of small income properties, this could also ultimately result in higher rents for tenants.
This reports set out to answer the following questions:
- What is the proportion of units that were quickly resold? Do some sectors and housing types stand out in this regard?
- What was the increase in prices for the units that were quickly resold? Does this increase differ from other market transactions?
Key highlights include:
- From January 2016 to the first quarter of 2021, market conditions tightened. This has increasingly favoured sellers and drove up prices in the Montréal census metropolitan area. This period coincides with an increase in the proportion of quick resales, although these remained low.
- The growth in prices for quick resales was generally much higher than for all market transactions. More particularly, in the single-family home and plex (properties with (with 2 to 5 units) segments.
- However, this only had a minimal impact on the median price growth calculated for all transactions, given the small proportion of quick resales on the market. Therefore, quick resales are probably not the most determining factor to explain the current affordability challenges.
- An increase of speculative purchases like quick resales would increase competition for households who simply want to meet a housing need. This could prompt some of them to take on more debt to buy a property. In the current overheating Montréal real estate market, the situation must continue to be monitored.
Download the full report (PDF)
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