May 1, 2009
Montreal bucks trend as home prices increase by 3.2%
Reading the newspaper this week was truly an eye opener, or was it?
Headlines in the Montreal Gazette shouted “Montreal home prices climb”,
while the national trend actually indicated the contrary.
There has been a country wide decline in home prices to the tune of 4.1%,
yet in Montreal we have witnessed an increase of 3.2%. Can it be that Montreal has managed to escape the effects of this wonderful recession the rest of the country seems to be experiencing? Is Montreal recovering quicker than the rest of the country, not to mention our neighbours to the south, or are we the poster kids for PT Barnum who has been erroneously credited with saying “there is a sucker born every minute”.
The facts are that PT Barnum never said it, and Montreal is still mired in a recession which has blanketed the entire country.
At first glance the fact that properties have risen in price is an amazing feat, considering the state of our economy, but there is another side to this equation. Although it is true that the prices of homes sold in Montreal have gone up, the fact of the matter is that the total of properties sold has declined. As you can see there are many ways to look at statistics, for example, if I were to say that 20% of all car accidents are caused by drunk drivers, you could say that conversely 80% of all accidents are caused by sober drivers. Without looking at the other side of the equation you would automatically deduce that you are safer to drive while inebriated.
Getting back on topic, why has Montreal seen a rise in home prices? Possible answers could be that Montreal’s market was previously under valuated, or the rise in property taxes brought home prices along for the ride, because our informed buyers check out the city evaluations prior to any purchase. I prefer to think that our vendors and their over priced homes have proven that there is indeed a sucker born every minute.