Montreal's luxury real-estate market is hot, hot, hot
Sitting in the sales office of his latest big project, Michael Broccolini just can't stop smiling. And with good reason; he is describing how buyers responded to his new 35-storey condo development, "We opened it to public sale the second week of October, and a week later we were 80 per cent sold."
That is a stunning sales performance. The tower, named for its municipal address, 628 St. Jacques, will have 258 units, meaning Broccolini and his team sold about 200 condos in seven days. "We knew the market was on fire, we just didn't know what "temperature" the market was," he says.
What makes it even more remarkable is that nothing in the building is a bargain. It is high-end, luxurious and pricey. The smallest and least expensive unit (470 square feet) sells for about $330,000 before taxes. The largest and most expensive unit is the (as yet unsold) penthouse; 4,000 square feet and costs $4.8 million before taxes.
"It is quite an achievement," Broccolini says, smiling. "I feel really good about it."
Broccolini's success is consistent with recent economic reviews of Montreal real estate trends, including the latest quarterly report from the Quebec Federation of Real Estate Boards. It reported significant increases in transactions at the higher end of the real estate scale; a jump of more than 30 per cent for properties worth more than $500,000 and 40 per cent increase for properties worth more than $700,000.
But why is the high-end category so hot right now?
There is, of course, the real estate adage "location, location, location," and that could explain in part Broccolini's success at 628 St. Jacques. It sits on prime real estate, on Victoria Square in Old Montreal. A five-foot model of the project promises an Art Deco-inspired tower. "We wanted it to look like it belongs in Old Montreal or old New York," says the 28-year old entrepreneur. But that doesn't really explain the rush to buy. Not even the rooftop sauna and pool ("tallest pool in the city") explains it.
Success breeds success
Broccolini says his project and other luxury projects in the city are doing well because Montreal is doing well.
"Look at unemployment at a 30-year low. Last year, Montreal created more full-time jobs than the rest of the country combined. Tourism is up, and things like more direct flights to places like China … all these things add energy to the city. In my lifetime, I don't think there has been a better time. I don't think Montreal has been as "hot" as it is right now."
If you build it … they will buy
Broccolini is not the only one successfully selling high-end properties right now.
A year ago the Gazette featured a luxury development project by Groupe Quorum, in Laval Sur Le Lac. At the time, construction of Phase One had just started and the sales pitch just launched. Now, Quorum's marketing manager, Maxime Laporte, is also wearing a broad smile.
"We are 50 per cent more progressed than we expected to be at this time. Phase One is due for occupancy in February and is 90 per cent sold. Phase 2 is being built and is 60 per cent sold and even Phase 3 has hit 50 per cent sold, so construction of that is being moved up. The sales and absorption of this luxury product have exceeded even our own forecasts."
Laporte agrees that the health of the Montreal economy is partly responsible for the positive trend, but mostly he credits the high quality of new luxury projects for pace of sales … an 'if you build it luxuriously, they will come' idea.
"It has been years, since the '80s and '90s, since there was a big push of luxury products built. Now, those are older inventory. If you think about Westmount or along Sherbrooke St., those luxury products are in good shape, but they are the of the last century, and luxury is the 'gout de jour.' You want the condo of today, with the different use of space and design. So, this is the right time to be selling the latest in luxury," he says.