Home Searching in Canada: A Rowhouse in Previous Montreal With Revenue Potential

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House Hunting in Canada: A Rowhouse in Old Montreal With Income Potential

This four-story Greystone townhouse is located in Old Montreal, the historic river district east of downtown Montreal. The property is opposite Marché Bonsecours, a restored building from 1847 that once housed the city's main public market. Behind the market building are the Old Port of Montreal and the St. Lawrence River.

"This is the beating heart of picturesque Old Montreal," said Felix Jasmin of Engel & Völkers Montreal, the listing agent.

Built in 1870, the six-bedroom, three-bathroom home offers 12,000 square feet of living space, including a detached rear carriage house. From the street, an arched entrance opens into a long entrance hall and double-sized living room, whose gleaming marble floors once adorned the nearby Bank of Montreal headquarters. "The owner's contractor happened to be the guy who wrecked the bank," said Jasmine.

Tall, barred windows run the length of the living room and illuminate the exposed brick wall and whitewashed surfaces. "The wooden windows are very typical of Old Montreal," said Jasmin. The living room connects to a formal dining room with a huge chandelier and a masonry decorative fireplace.

The dining room is connected to a small, furnished solarium with a glass ceiling and a French country house style. "The idea was to have your aperitifs in the living room, dinner in the dining room and your schnapps in the solarium," said Mr Jasmin. A door opens from the solarium to a small rear terrace. The kitchen of the house, also next to the solarium, "was intended as a functional kitchen for meals and looks very different from the rest of the house," said Jasmin.

A curved staircase leads to the master suite, which takes up the entire second floor. "This was the owner's private floor and the building's masterpiece," said Jasmine. "It feels like a Parisian apartment." A large en-suite bedroom flows through a wide archway into a high ceiling and tile living room. A pair of cast iron doors hide an office that Mr. Jasmine said could become a bedroom.

Five bedrooms are on the third floor of the building, but only one bathroom. The floor has a small kitchen with a washer and dryer and a dining area. A spiral staircase leads from the third floor to an unfinished attic that is “almost full size. A tall adult can stand in it, ”said Mr. Jasmine.

The owner, a Montreal businesswoman who also lives in Paris, "once held in-house fashion shows and many dinners for the who-is-who of Montreal," said Jasmin. Owned for over half a century, it has replaced electrical and HVAC systems, upgraded windows to withstand the Montreal winters, and preserved the landmark facade.

The property includes three commercial spaces. Bremner, a popular fish restaurant on the lower level, is temporarily closed due to Covid-19. The Auberge Bonsecours, a bed and breakfast with six rooms, rents the rear carriage house. A shop on the first floor is empty.

Old Montreal on the banks of the St. Lawrence River, once written off as tired and touristy, has become chic in the past decade. Historic buildings along the cobblestone streets have been converted into condominiums and many new residential projects have sprung up. High-end retailers occupy spaces that once housed souvenir and t-shirt stores. Montreal-Trudeau International Airport is approximately 15 miles to the southwest.

"The downside is that parking can be difficult," said Gael Lupien of RE / MAX ACTION Westmount. “They have fewer services than other parts of the city. And there is still a tourist atmosphere that is not for everyone. "

From 2017 to 2019, Montreal largely avoided falling price growth in much of Canada. According to Charles Brant, director of market analysis at the Quebec Professional Association of Real Estate, the demand for real estate in the city has grown "dramatically" over the past three years with Quebec's "burning economy" and Montreal being the engine of real estate agents.

"It's moved from the buyer's market to the seller's market," said Brant. “The diversification of our economy continues to attract a highly qualified workforce. We have great universities. We are a center for technical innovation. "

According to an August report by Century 21 Canada, Montreal property price growth leads all Canadian cities in 2020. The cost of a single-family home in the city center rose 42 percent in the same period in 2019. Townhouses rose 44 percent and condos rose 14 percent.

The average price for a home in the greater Montreal area was Canadian $ 401,300 ($ 305,000) in July, a 14 percent year-over-year increase from July 2019, according to the Canadian Real Estate Association (CREA), which reported an increase in activity after the easing Quarantine restrictions.

Likewise, sales volume has recovered from a steep drop in the spring when the coronavirus pandemic weighed on the economy. At the national level, "new registrations were at their highest level since July, while sales were at their highest level for any month in history," CREA reported. In Montreal, 5,356 residential properties were sold that month, up 46 percent from July 2019, according to Mr Brant's organization.

However, a June report by Teranet – National Bank of Canada predicted a "sharp drop in house prices of around 10 percent nationally, sharper than in the country's past three recessions" due to the pandemic.

According to CREA, a national increase in available housing in July was marked by increases in the greater Toronto area. However, Montreal has recently become an attractive alternative to Toronto and Vancouver, Canada's most expensive housing markets.

"Investors see Montreal as the next best place," said Liza Kaufman, founder of the Kaufman Group at Sotheby & # 39; s International Realty Quebec. "Historically, we have always lagged behind because of the political instability associated with Quebec independence, but that is no longer a factor." And she added that Quebec has no foreign buyer tax, which British Columbia introduced in 2016 and Ontario in 2019.

The city's thriving technology, artificial intelligence, and biotechnology sectors should continue to fuel the market and protect Montreal from the worst economic headwinds from Covid-19, Jasmin said. "We have this nice pressure from high paying jobs and lots of newcomers."

Homes are rare in Old Montreal, said Carole Baillargeon of Century 21 Immo-Plus, who has specialized in the neighborhood for 20 years. The region's housing stock consists mostly of condominiums, "with maybe 25 houses," she said. "People love the old port area and it's a very small neighborhood, so everything here should keep its value over the long term."

Despite the general strength of the market, the pandemic has hit the neighborhood hard. Asian and American shoppers who invested in the neighborhood stay away. “The border is closed. Nobody is coming,” Ms. Baillargeon said. “Some investors bought condos to rent on Airbnb, but that's gone. And parents bought units here for kids in college, but that is being put on hold. "

In Ville-Marie, the neighborhood that also includes Old Montreal, condominium sales declined 52 percent in the second quarter of 2020 compared to the same period last year, said Francis Cortellino, an economist at Canada Mortgage and Housing Corporation, Canada's national housing agency . However, prices were not affected as "supply is still quite low".

Condos in the neighborhood range from about $ 375,000 to more than $ 7 million Canadian ($ 285,000 to $ 5.3 million), with many being in the high six digits. Prices "have actually come down a bit I've never seen before," said Ms. Baillargeon.

Mr Jasmin said that the locals are currently fueling the demand. "We don't talk about investment properties, we talk about houses," he said. "Because of the pandemic, people are buying the house they wanted to buy or moving to the neighborhood they always thought of."

Ms. Kaufman, whose offerings include large houses and luxury condominiums in affluent neighborhoods outside of the city center, still sees "investors from Asia and Europe looking to move to a place that is believed to be safe and financially sound."

Mr Jasmin said the number of American buyers has also increased, with some buying after virtual visits. "They tell us they are tired of politics at home," he said.

In the meantime, Chinese investors who were in the market before Covid-19 have held back. "The money is stuck in China."

There are no restrictions on foreign buyers in Quebec. However, according to Julie Côté, non-resident tax regulator at auditing firm FL Fuller Landau, banks require a minimum deposit of 35 percent for non-residents. (Canadians can save only 5 percent.) Banks are also demanding "lots of paperwork" from non-Canadian buyers to ensure the origin of the funds, Ms. Côté said, a process that can take up to six weeks. "I've seen a lot of sales postponed because of it," she said. Many overseas buyers choose cash transactions to avoid the process.

Quebec law requires buyers and sellers to work with notaries, not attorneys, in real estate transactions. Due to Covid-19, overseas buyers can now execute documents electronically rather than by proxy or in person, said William Malkinson, a notary public at Drazin Friedman Notaries in Montreal.

French and English; Canadian dollar (1 CDN = $ 0.77)

Notary fees range from $ 1,200 to $ 1,500 Canadian ($ 900 to $ 1,150), Ms. Côté said, with brokerage commissions between 4 and 5 percent. Buyers also pay combined provincial and federal sales taxes of 15 percent of the sale price, she said.

Annual property taxes on this home are roughly Canadian dollars ($ 32,800), Jasmine said.

Felix Jasmin, Engel & Völkers Montreal, 514-507-7888, montreal.evrealestate.com

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