CMHC’s latest Housing Market Insight on the Montréal area examines vacant residential land and its effect on the area’s housing market. This Insight first looks at the amount of vacant residential land available in several sectors of Greater Montréal. It then explores the relationship between the supply of vacant land, the value of such land, house prices and residential construction. Some highlights:
- The Island of Montréal accounts for a third of Greater Montréal, but only had 7% of the area’s vacant residential land in 2014.
- As expected, the scarcity of vacant land on the Island had an impact on the land’s value. Land value in 2015 for a single-family home ranged from $10 to $20 per square foot in parts of the North Shore and South Shore. On the Island, where land was scarcer, the price easily surpassed $100 in some central sectors.
- Land value was also reflected in house prices. On the North Shore and South Shore, the average price of a single-family home was between $280,000 and $295,000 in 2015. On the Island, it was over $500,000.
After giving an overview of the current status of vacant land in Montréal, we take a more historical turn. More specifically, we look at the evolution of land values on the Island of Montréal since the mid-1990s. Our analysis gives an interesting picture of the impact rising land values have had on house prices across the Island.
A final case study comparing Granby and Drummondville reinforces the links between the supply of vacant land, house prices and residential construction.