Property Rating Role | Towards a 30-40% increase in Montreal

The overheating of the real estate market during the pandemic will leave its mark on the next Montreal metropolitan area assessment roll, which will be presented on September 14. The value of residential properties with fewer than 5 units should increase by 30 to 40% compared to the current municipal register values.

Posted at 5:00 am

Andre Dubuc

Andre Dubuc
The press

The figures come from a study conducted by real estate data company JLR for the exclusive account of The press.

This rapid increase is related to the boom in the Montreal real estate market during the pandemic in 2020 and 2021.

According to this study, which analyzed roughly 20,000 transactions that took place in 2021, the year that served as the reference year for creating the next Rolls, homeowners should expect an average increase in value of just over 40% while the value of condos increases will jump closer to 30%.

Owners of small income properties of 2 to 5 units, commonly referred to as Plex, should increase the value of their building by a percentage between 30% and 40%.

The expected increase will be double that in the 2020-2021-2022 roll, which took 2018 as the reference year. It recorded an average increase in home values ​​of 13.6%.

The previous list, from 2017-2018-2019, showed an even lower average increase of 5.8% for the residential sector.

It is important to remember that a spectacular increase in the values ​​on the reel will not automatically result in an increase in local tax bills. The real estate tax is of course calculated according to the value of the property, but also according to the tax rate that is set by the municipal council when the annual budget is approved. Logically, for example, a 25% increase in value is offset by a decrease in the tax rate of the same magnitude to keep tax revenues more or less constant.

Similar estimate

JLR’s estimate is consistent with the estimate made by City of Montreal appraiser Bernard Côté when he appeared before the city’s Treasury Commission last January.

Mr. Côté had agreed to provide elected municipal officials with an overview of what the City of Montreal’s 2023-2024-2025 Scorecard will look like.

“It is clear that it is a role that – for the residential sector – up to 30% [d’augmentation] ‘ the township official said.

In contrast to the Roll in Force (where the east of the island experienced slight increases in value), this time the value fluctuations are relatively homogeneous between the cities of the island of Montreal and between the districts of the city of Montreal Montréal.

Most sectors are seeing increases of around 30-50% in homes. More affluent neighborhoods, on the other hand, will see below-average growth in value. This applies to Westmount, Outremont and Mount Royal. The opposite is true for West Island towns, such as Dollard-des-Ormeaux, where value growth is close to 50%.

Downtown has suffered

In the case of condominiums, the range of increases in value is broader and ranges from 25 to 40% in the vast majority of quarters.

The exception to this rule are downtown and Griffintown condos that have been abandoned during the pandemic, points out Francis Cortellino, an economist at Canada Mortgage and Housing Corporation (CMHC).


PHOTO MARCO CAMPANOZZI, THE PRESS

Apartment towers in Griffintown

The press had asked Mr. Cortellino to consult the evolution of the median price of the houses resold through the Centris system between 2018 and 2021. Centris is the central database for real estate agents.

Downtown and Griffintown’s decline in popularity will be reflected in the new role. The increase in condo values ​​should be around 20%, less so for certain areas within these two boroughs.

The role, which will take place on January 1stah January 2023, valid for three years. It is intended to reflect the market conditions prevailing on the reference date of the 2023-2024-2025 roll i.e. 1ah July 2021.

methodology

JLR’s analysis gives a good idea of ​​the next land roll without yielding identical results. The city divides the island into almost 3,800 homogeneous sectors (neighborhood units). The average fluctuation is obtained by comparing the sales prices for 2018, the reference year of the next list, with the values ​​entered in the list applicable to all properties in the neighborhood unit. Deviations are also confirmed by using other valuation methods. For its part, JLR compiles sales by city and suburban areas. For example, if the company counts 101 home transactions in 2018 in a particular county, it calculates the ratio between the price paid and the valuation of each of the 101 transactions. JLR then keeps the median ratio, which is the ratio that divides the sample into two equal parts. Sales of new build properties are excluded from the analysis, as are sales that are not representative of the market.

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