Homebuyers on the Island of Montreal can expect to pay almost double that of those on the North Shore or South Shore areas.
A new CMHC insight report says that while the average price for a single-family detached home on the North Shore or South Shore in 2015 was between $280,000 and $295,000, on the Island of Montreal it was more than $500,000.
That’s in part because land prices - which were between $10 and $20 per square foot in 2015 in parts of the North Shore and South Shore – easily surpassed $100 psf in some central sectors.
CMHC says that the rise in land prices on the Island is probably due to higher demand but there is also the issue of the scarcity of vacant residential land on the Island, which accounted for just 7% of the Greater Montreal area’s total in 2014, despite the Island making up a third of the area.
The report also notes that, due to the lack of land available, density on the Island is far higher than in the North Shore and South Shore areas.
The analysis concludes that land values in the City of Montreal accounted for 47% of the rise in single-family house values between 1993 and 2015, therefore not the main reason for the price rise.
This compares to an impact of at least 50% on house price growth in municipalities outside the City, where land scarcity was greater.
