Montreal’s downtown is getting a big booster shot of new condominium development. Maybe too big a shot.
Following the pattern in Toronto, Montreal is now a city with far more sellers than buyers for condo units.
And the downtown could be reaching saturation levels.
The latest statistics, from March, indicate there were 3,000 units under construction in the downtown, said Hélène Bégin, senior economist with Desjardins Economics.
“There are a lot of construction cranes. The downtown is the hot spot,” she said.
The ratio of sellers to buyers in the area has reached 17:1 and condo prices stagnated in the first quarter, she said.
At least one project was taken off the market last year due to poor sales, according to a report by Altus Group.
One major developer that isn’t perturbed by the trend is Cadillac Fairview Corp. Ltd., the real estate arm of Ontario Teachers’ Pension Plan.
The Toronto-based company is pushing ahead with its ambitious $2-billion office-retail-residential development plan aimed at revitalizing and extending southward Montreal’s downtown.
Dubbed “Quad Windsor” after the heritage-designated Windsor Station – next door to the Bell Centre, home of the Montreal Canadiens – the development envisions a total of 4.5 million square feet when completed in about 15 years.
The project is a more sprawling version of Cadillac Fairview’s mixed-use Maple Leaf Square around the Air Canada Centre in Toronto, said Sal Iacono, senior vice-president of development and portfolio management for Eastern Canada.
Condos will be a “substantial part” of the Montreal offshoot, said Mr. Iacono.
Already under construction is the Tour des Canadiens, with 555 units and a sports bar, adjacent to the Bell Centre in the very heart of hockeyland.
Two sister towers are slated for construction and there are plans for several more.
The residential part of the mix could represent “something well over 2,500 units by the time all is said and done,” said Mr. Iacono.
Of course, that influx will take place over a 15-year period, thus allowing for the new stock to be absorbed in phases.
“You have to look at long-term trends. There are a lot of excellent, solid, fundamental reasons why, over the long haul, this trend will only strengthen,” he said.
Essentially, Cadillac Fairview is betting that Montrealers’ desire to embrace a hip downtown lifestyle is more than just a passing fad.
“We’re creating an incredibly vital sector in the downtown,” said Mr. Iacono.
Paul Cardinal, director of market analysis at the Fédération des chambres immobilières du Québec, says Montreal’s downtown is undergoing a “residential renaissance.”
“It’s not just about proximity. It’s a matter of lifestyle, with new condos, stores, restaurants, bakeries.”
Mathieu Collette, who heads a research team focused on the condo market at Altus Group, said downtown condos in Montreal tend to attract two demographic types: baby boomers, including empty nesters, and young professionals.
It’s important to make the distinction between different zones in the downtown, said Mr. Collette.
The eastern part is not as hot as the western sector, he said.
“Some projects have been for sale for a long time and they have not attained the 60-per-cent threshold [generally viewed as the go-ahead to build]. They’re at risk of not being built,” he said.