The Fonds immobilier de solidarité FTQ, the Société d’habitation du Québec, the Quebec Professional Association of Real Estate Brokers (QPAREB) and the Service de l’habitation de la Ville de Montréal unveiled today the results of a vast survey on residential real estate in Québec. Conducted by Léger in the fall, the web-based survey polled 6,755 people on their home buying and selling intentions in the next five years. A similar study was conducted in 2021. The 2022 edition was designed to gauge whether the pandemic is having a lasting impact on consumers’ housing choices and to find out to what extent environmental factors play into these choices.
GREEN HOUSING
Leaning green
Fifty-nine percent of homeowners and future buyers in the Montreal CMA would be willing to pay a premium for an environmentally friendly home. This is higher than the provincial average. Although this premium should be associated with savings or greater resale value, the Montréal CMA has the lowest percentage of people who would refuse to pay such a premium (33% compared to 36% for the province as a whole). Only 34% of buyers in the Greater Montréal area feel they have enough information to assess the environmental impact of a property. The Montréal CMA is also where the largest proportion of homeowners and future buyers (72%) would like to see standardized environmental assessment criteria for housing.
Green housing—tenants’ perspective
Enthusiasm for green housing is slightly lower among renters in the CMA, with 56% willing to pay a premium for green housing. Only 28% say they have enough information to assess a building’s sustainability.
“This year’s survey confirms that people need more information to make better environmental decisions when buying or renting a home. The Fonds immobilier de solidarité FTQ is committed to ESG (environmental, social and governance) in order to promote environmentally responsible projects and reduce the environmental impact of real estate development. We all have an influential role to play in the real estate sector to demonstrate the benefits of sustainable buildings. With the right tools, people can make informed decisions that will benefit the environment, our communities and future generations.”
Martin Raymond, Senior Vice-President, Real Estate Investments, Fonds immobilier de solidarité FTQ
Energy performance
In the Montréal CMA, both owners and renters rank energy efficiency as the top measure of a home’s sustainability. Owners then look at the quality of the materials and whether the location reduces the need for car travel. For renters, the second most important factor is a location that facilitates active transportation, followed by material quality.
Noise pollution
This year’s survey added soundproofing as a selection criterion for apartments and condominiums. This new criterion topped the list of desirable features for both condos and apartments. Limiting noise pollution emerged as a major concern for those living in residential buildings.
HOME-BUYING INTENTIONS
Buying intentions remain unchanged in the medium term
The increase in home prices had reduced the purchase intentions of Montréal households in 2021. This year, only 24% of households plan to buy a property in the next five years. However, despite the uncertainties and the increase in interest rates, 13% plan to buy a property in the next two years, the same level as in 2021. When asked why they don’t plan to buy, unlike the older cohort, the youngest age group cites financial inability. Interestingly, the preference would be for urban centres if prices were more affordable, rising from 24% in 2021 to 28% in 2022. It is worth noting that concerning the time now required to come up with the down payment, respondents in the Montréal CMA most often cited 3-5 years (28% of cases), versus 24% for less than a year. However, if we look at past purchases, buyers in the Montréal CMA stand out, in 32% of cases, by having made a down payment of 20% to 30% of the price, compared to 25% last year, a proportion and an increase that is well above the provincial average.
“The rapid increase in prices over the past three years in the Montréal CMA and the sudden rise in interest rates in 2022 have had a negative impact on the buying intentions of younger buyers. However, the proportion of households that plans to purchase a property in the next two years remains stable. People have adjusted their budget since the average home price in Montréal has gone up from $440,000 to $458,000 and will remain there in 2023, and assuming they’ve taken into account the increase in the cost of financing. This information indicates that Montréal households still want to buy a home. This can be explained by the anticipation of more favourable market conditions and a level of savings that is significantly higher than the provincial average.
Charles Brant, Director of the QPAREB’s Market Analysis Department
Renters for longer
Renters in the Montréal CMA are also affected by rising prices. Twenty-eight percent said they rented because they could not buy in their neighbourhood. This compares to 22% in 2021. Due to high rents and a housing shortage, tenants in Greater Montréal are staying put. Forty-nine percent planned to move to another apartment within the next five years, compared to 59% in 2021.
“The data reported in this survey, combined with the low vacancy rates in several regions, underscore the importance of considering these facts before deciding to end a lease or move. People need to consider and analyze different residential options in order to make more informed decisions in this regard.”
Claude Foster, President and CEO, Société d’habitation du Québec
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