HOUSING IN MONTREAL: BUYING OR
RENTING YOUR HOME?
Do you dream of living in Montreal? Is it better to buy or rent your home?
At the crossroads of a new life, what is the best housing option: buy or rent? What style of home? For what budget and under what conditions?
Investment project, market price, real estate loan, promise to sell… buying or renting a home in Montreal, knowing the market value of a property and being accompanied at every step of the transaction is a process where expertise counts.
That’s why you can count on HP & Associés to help you!
KNOW THE STATE OF THE REAL ESTATE MARKET
Does the metropolis of Montreal stir your imagination? Dreaming of a different place, finding new perspectives and expanding your opportunities is a widely shared desire these days. Before you embark on your journey, however, be well informed about current real estate market trends.
SOME FACTS
Here are some important facts to help you decide whether to buy or rent a home in Montreal:
- With the COVID-19 pandemic, a telecommuting lifestyle and a low mortgage rate, real estate sales have continued to increase in 2020, reflecting new desires for regional housing and homes with terraces, gardens and swimming pools. According to the Association professionnelle des courtiers immobiliers du Québec (APCIQ), real estate activity will remain brisk, despite the drop in properties for sale..
- The massive arrival of tourists, expatriates and international students, combined with the reopening of borders, is amplifying the pressure on the real estate market to the advantage of sellers over buyers, leading to an increase in property prices for the former and the temptation for the latter to outbid each other in order to obtain the coveted property. This will satisfy sellers who are looking for a good deal.
- On the buyer’s side, the incentive to dive into the purchase (and first purchase) of a property comes essentially from the decrease in mortgage rates in Quebec, particularly the decrease in the Bank of Canada’s key interest rate. Many people want to take advantage of this decrease in interest rates to buy their first home. This trend could continue until 2023 (or until the inflation rate reaches the 2% target in the long term).
- In this particular context, finding a home such as a family home or a three-bedroom apartment at an affordable price in a desirable neighbourhood is proving to be more difficult than in ordinary times. While the scarcity of homes for sale is expected to continue, many experts expect prices to become more stable over the next few years.
In light of these new realities, HP & Associés has its eye on the ball. You can also count on its list of contacts, whether you are looking for a house, a condo, a loft or an apartment.
IDENTIFYING INVESTMENT OPPORTUNITIES
Beyond this exceptional context, the acquisition of a property in Quebec, particularly in the Greater Montreal area, is a sure value and a profitable investment. The exceptional quality of life in Quebec is not the least of its assets. With its 17th century architecture, the Belle Province is home to properties with a strong heritage value. Under the effervescence of its cultural life combined with economic dynamism, the high towers in the very heart of the city attract investors from all over the world.
Good to know:
- A single-family home in Montreal costs less than in Toronto, Vancouver or any other major North American city.
- According to the World Economic Forum’s most recent report on global competitiveness, Canada’s banking system ranks second in the world. Interest rates are lower compared to other global markets.
- Hydro-Quebec has the cheapest electricity in North America. Energy that keeps you warm all winter and cool all summer.
- Montreal is home to approximately 170,000 students in eleven universities (four of which are world-class).
BUY OR RENT IN MONTREAL?
After a friendly bed and breakfast or a first home, you have the idea to settle down permanently? On this path, is it more advantageous to rent or buy a home? When housing is scarce and purchase prices are high, renting may seem the best option. However, the choice to buy may be a better investment than it seems.
There are several things to consider:
- Compared to the price of renting, a landlord’s monthly payments (conventional mortgage, city and school taxes, insurance) are generally lower.
- In addition, the costs of owning a property are low, and real estate is increasing in value well above the rate of inflation and financing rates are low.
- While renting has its advantages, it sometimes has restrictive conditions, such as the landlord not allowing pets, smoking, painting the walls or adding a nail to hang a picture frame, etc.
- The tenant situation remains partly unpredictable. Legally, a landlord has the right to repossess the property for his or her own use or that of his or her immediate family, thus forcing the tenant to leave the premises.
- The temporary nature of a rental has the disadvantage of involving multiple moves and, sometimes, changes of neighborhoods and schools, leading children to experience a new “mini expatriation” in a short period of time.
LOOKING FOR A RENTAL?
All things considered, a rental seems to be more suited to your needs? Don’t leave anything to chance, let us guide you…
Choosing a home is sometimes a matter of love. But, beyond the first glance – before signing the lease – we can only recommend that you take a closer look. A short list of considerations before renting an apartment or condo:
- Lease terms:
Does the lease have any special conditions? If so, which ones?
Are there any building rules? If so, can we have a copy?
Can we use/access the building’s yard?
Do we have the right to animals ? If yes, which ones?
- Apartment layout:
Can we make any decorative changes?
Who pays for the painting?
Can we create a small garden?
Can we install a satellite dish or cable?
- Insulation and soundproofing of the apartment:
Does the apartment have good thermal insulation?
Is the apartment well soundproofed?
- Services and equipment included:
Are heating, hot water and electricity included in the rent?
If not, what is the monthly cost?
What type of heating is used in the apartment?
Can we rent with appliances included?
Can a washer/dryer be easily installed in the unit?
- Maintenance Responsibility and Charges:
Is any work scheduled prior to move-in or during the lease?
Who is responsible for minor repairs?
If appliances are included in the lease, who pays for their repair?
Who pays for snow removal in the winter?
Who pays for lawn care in the summer?
- Building Security:
Have the locks been changed recently?
What parts of the building are locked?
Is it possible to install an alarm system?
Are there surveillance cameras in the common areas?
- Treatment of vermin in the building:
Has there been any recent vermin (mice, bed bugs, etc.) in the building?
How was this resolved ?
- Storage/Storage:
Does the building have a storage or storage room?
Is there an additional charge for storage?
Is the storage space secure?
Where is the storage room located?
Does the building have a secure room to store our bikes, strollers, etc.?
- Parking:
Is a parking space assigned to the unit?
Do we have to pay extra for parking?
Are there parking spaces for guests?
Where can we park the car in the neighborhood?
- Neighborhood:
What is the neighborhood like?
What are the local businesses?
How are the other tenants in the building behaving?
How often do tenants change in the residence?
Number of rooms, ½ that is?
1 ½, 2 ½, 3 ½, etc. refers to the number of rooms. The bathroom counts in Quebec as half a room. A kitchenette is not a full kitchen.
Result:
2 ½: an enclosed bedroom, a living room, a kitchenette and a bathroom
3 ½: one enclosed bedroom, a living room, a full kitchen and a bathroom
4 ½: two enclosed bedrooms, a living room, a kitchen and a bathroom
5 ½: three bedrooms, etc.
6 ½: four bedrooms, etc.
Small lexicon of the characteristics of the housing
Cable: cable TV (or television) subscription service.
Heated/unheated: heating costs included or not in the cost of the rent
Amenities: necessary amenities (stove, microwave oven, gas/oil/electricity, cable TV/phone service/internet/hot water tank)
Light: cost of electricity included in the rent.
Locker: storage space located inside or outside the building.
Furnished, semi-furnished: furniture and appliances included in the rent.
Non-smoking or NF: no smoking allowed.
Are you intimidated by real estate terms? Consult our glossary.
LOOKING FOR A MONTREAL HOME TO BUY?
Are you looking for a home? The purchase of a property is often an important moment in one’s life. Our real estate agency guides you from A to Z in the process of buying your property.
UNDERSTANDING THE BUYING PROCESS
As a prelude to any property purchase, if you are an immigrant, you will need to take a few steps, such as:
- Opening a bank account and subscribing to a credit card to build your credit file. Please note that most financial institutions grant credit cards to newcomers. Two to three months of use is enough to build a credit history.
- Did you know that as soon as you arrive, you can take out a loan to buy a property? With a down payment of 35%, it is possible to obtain a loan. After a few months on Quebec soil, with a newly created credit history, you could obtain a loan of up to 95% of the property’s value.
- First step: pre-approval from the bank. This is the starting point. You can apply for a mortgage pre-approval certificate in advance of any offer to purchase, indicating your borrowing capacity (maximum amount) in terms of a mortgage loan. This will facilitate the agreement or negotiation with the seller of the property. HP & Associés can guide you towards bankers with experience and programs adapted to newcomers.
- Interested in a property? You make an offer to purchase. Once the offer is accepted by the seller, your financial institution gives you the expected proof that you have enough money for the down payment. If you have already obtained your pre-approval, this step will be much easier.
Want to learn more about the buying process?
Check out our guide to real estate in Montreal.
THE GOOD REFLEXES OF THE BUYER
For any new buyer, it may be wise to:
- Calculate the costs associated with the purchase price for a realistic evaluation of the property, such as: the mortgage, insurance, inspection fees, notary fees, perhaps the co-ownership fees, the five taxes (the Welcome tax, the sales tax, the CMHC – Canada Mortgage and Housing Corporation – premium tax, the municipal tax and the school tax). Not to mention the costs related to the electrical, television and internet networks.
- Have the property inspected by an inspector who is a certified expert and member of an association or order, in order to know the real state of the property – interior and exterior – and to avoid unpleasant surprises (hidden defects) but also to foresee the work to be done. Although this pre-purchase inspection is not mandatory, it is recommended. Good to know: it is possible to cancel a promise to purchase if the inspection turns out to be negative and if the inspection appears in a conditional purchase clause.
Want to know more about the names of properties in Quebec and the type of housing before buying? Consult our guide on property types.
Understanding the Credit Report
To build a good credit report, know that:
- A credit report informs (with your permission) the landlord or lessor, of your credit history (jobs, home addresses, loans taken out, date an account was opened, credit limit, balance…)
- Building your credit history begins with the first credit transaction. Simply use your credit card and show that you meet the due dates by paying it off in part or in full.
- And if you don’t have a credit report, you can still get other proof from your bank that you are paying your rent and other regular bills.
COMBINED EXPERTISE
Investment project, market price, real estate loan, promise to sell… buying or renting a home in Montreal, knowing the market value of a property and being accompanied at every step of the transaction is a process where expertise counts. That’s why you can count on HP & Associés.
Whether it’s to visit a property, evaluate overhead costs, submit an offer to purchase, negotiate the price… we accompany you at every step of the process, providing you with customized advice. In addition, HP & Associés works closely with real estate investors, from risk analysis to banking and legal issues.
Thanks to our combined expertise, our team guides you with ease and confidence towards the best choice of property, according to your desires and needs, and advises you in the optimization of your investments year after year.
