What happened to the Montreal real estate market during COVID? What caused the huge housing rush? While the light at the end of the pandemic tunnel might slowly be coming into view, we wanted to look back and learn from this very unique phenomenon.
Before the pandemic, we were already in a seller’s market, and the demand for property was outweighing the supply. Once COVID kicked off, a lot of people actually thought the market would crash – they were expecting a total recession.
However, what we experienced was quite the opposite. While many people lost their jobs, had their hours reduced, or were furloughed, many more Montrealers did not take a hit to their income at all.
Beyond that, those who were most affected financially were able to get help from a variety of government programs, which kicked in almost immediately. Generally, people weren’t actually going through bankruptcy; there were measures in place to catch their fall.
So, although the world was “ending”, if you will, many Canadians were safeguarded to a certain extent.
Now, instead of having to just live inside their homes, they needed to work there too. They needed more space, they needed an office, they needed room to breathe. People started valuing having a backyard and additional land along with their property.
This led people to begin searching for properties that were larger and could therefore accommodate those needs. This also explains why we saw a huge demand increase in the Laurentians.
During the initial lockdown, to help the economy stay afloat while countless businesses were shuttered, the government made sure to keep the real estate market moving.
How? They encouraged the banks to drop their interest rates by nearly half, which prompted lots of people to invest in housing both in the city and in the country.
The Laurentians and the Eastern townships had never experienced this level of demand, which increased the prices in those areas by leaps and bounds.
Something new homeowners have been experiencing since “peak” pandemic and all the way into the present is expensive, delayed construction.
The supply for new properties has therefore been delayed, which has contributed to the market overheating. Not enough supply, no new properties being built, demand remains sky-high, bidding wars ensue.
The chasm between supply and demand may never go away – we simply have to wait and see.
As interest rates slowly creep back up, we’re expecting to see more homes hit the market. But until then, there won’t be many factors pushing us towards a shift.
Curious about what makes the market tick? We have the answers! Reach out to our team anytime and we’ll be happy to talk real estate with you.