Real Estate News: 2nd Week of January 2025
14/01/2025
Condos: No Reserve Fund, No Mortgage!
Major financial institutions in Quebec, including Desjardins and the National Bank, have stopped granting mortgages to buyers of condos if the condo board cannot provide proof of a reserve fund.
This measure aims to strengthen the financial management of condo associations, in compliance with the law requiring an adequately funded reserve to cover anticipated repairs over a five-year period.
Market Impact
Real estate agents, such as Nathalie Bégin of RE/MAX Ahuntsic, report that this regulation complicates transactions, especially for smaller condo associations that are often poorly organized and lack reserve or self-insurance funds.
This situation could lead to a decrease in the value of many condos, as buyers are deterred by the lack of financing options.
Upcoming Reforms
The Quebec government is planning additional measures, such as mandatory maintenance logs prepared every five years by professionals. These documents will determine the amounts to be maintained in the reserve fund.
Condo boards will also need to provide buyers with certificates detailing the existence and balance of the reserve fund, as well as data from the maintenance log. These reforms, currently under consultation, are expected to be adopted by the end of 2025.
Buyers Remain Confident Despite Geopolitical Tensions
The 2024 Real Estate Market: Price Increases
The Quebec real estate market saw an 8.6% price increase in 2024. Key data include:
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Detached single-family homes: +10.6%, with a median price of $625,500.
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Condos: +6.3%, with a median price of $446,200.
Reasons for the Increase
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A 0.5% reduction in the Bank of Canada’s key interest rate in October 2024 revitalized the market.
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In total, five consecutive key rate cuts reduced mortgage rates, enhancing consumer purchasing power.
2025 Forecasts
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Overall price increase: +7%, with a projected median price of $599,307.
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Detached homes: +8%, reaching $672,516.
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Condos: +6%, reaching $474,350.
Hotspots
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Montreal: Expected price growth of 6.5%, with a median price of $655,082.
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Quebec City: A significant price increase of 11%, reaching $442,113. Demand continues to exceed supply, leading to multiple-offer scenarios.
Montreal Property Taxes: Capped at 1.8% in 2025
Relief for Taxpayers
Montreal’s administration, led by Mayor Valérie Plante, announced a property tax increase limited to 1.8% in 2025. This rate aligns with inflation recorded between August 2023 and August 2024.
Budgetary Efforts
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The City of Montreal reduced expenses and revised programs to adhere to this commitment.
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Boroughs are encouraged to follow suit and limit local tax increases.
A Budget Focused on Efficiency
The 2025 budget will be finalized in November, aiming to maintain essential services while providing greater fiscal predictability for citizens.
Conclusion
Despite economic and geopolitical uncertainties, Quebec’s real estate market remains robust. Montreal’s efforts to limit tax increases and reforms for condo associations bring stability. For investors and buyers, this is a strategic time to plan and act.
Take Action:
Contact the Tardif team for personalized advice on your real estate projects in 2025. We help you navigate this evolving market and seize the best opportunities. Schedule a consultation with our experts today.
