A report by National Bank and Teranet confirms that residential real estate prices in Montreal rose by 4.1 per cent last year, while across Canada prices declined.
In the country's three other large markets, the decrease ranged from -8.2 per cent in Calgary, to -4.2 per cent in Vancouver to -2.4 per cent in Toronto.
Buoyed by a run up in oil prices, Calgary saw resale prices leap by an average of 45 per cent in 2006. This led to a spate of speculative new construction. With oil prices down and the economy stalling, the city is now dealing with a housing glut.
In Vancouver, housing prices rose 24 per cent in 2007, which again led to a speculative frenzy that pushed prices out of the range of what the average consumer could afford. Prices will have to come down before the market can right itself, according the Michel Beauséjour, chief executive of the Greater Montreal Real Estate Board.
In Toronto, hits to the manufacturing sector have taken their toll on that city's housing sector, too. The troubled automobile sector is hurting prices in large swathes of southern Ontario. There was a story out this week that said you can now buy a house in Windsor for less than the cost of a new car. Never good.
Montreal has seen its own run-up in prices in recent years, the best of which was 2002 when prices rose by an average of 15 per cent.
Still, after a long recession in the mid 1990s, what the local market has experienced is 10 years of making up for lost time. Housing remains affordable, with little speculative investment, and few worries about over construction expect at the very high end of prices. Borrowing rates remain favourable and the economy, while volatile, is more diversified than in Ontario or Calgary and so might be better equipped to weather a recession.