Go West : real estate boom or doom?

Go West : real estate boom or doom?

The City of Montreal is living through a profound period of change. Dwindling infrastructures and stagnant economy have taken their toll on the city in the last ten years. It isn't the city's first downturn and it won't be its last. In the late fifties, Montreal lived through its first modern infrastructure and economic quagmire. The then leaders' answer to the problem was the largest infrastructure and event program in Canadian history, giving birth to modern Canada and Quebec, and spawning the most successful world fair in history - expo67. Then there was the summer games of the XXist olympiad. Post Olympic Montreal was the city's second modern downturn, the then Mayor Drapeau's answer was to relaunch downtown by passing the new Palais des Congrès, Complexe Desjardins and University of Quebec projects in the then decrepit red light district and Chinatown, shifting downtown eastward from Dorchester square. In the early 90's our town lived through another recession. The then administration tabled on rethinking urban transportation by launching suburban train lines to sustain the city by facilitating the intercity transit and by repatriating air traffic from the doomed Mirabel Airport back to inner-city Dorval. Unfortunately, this decision encouraged an even faster exodus of the population out to the newer cheaper suburbs and outskirts of the greater Montreal area thanks to better transit out and a noisy inner city airport. In 2003, the provincial government attempted to rectify this error by merging 19 suburban cities to create the mega city. The next 10 years are history. Corruption and bad management has led the mega city of Montreal into its worst downturn yet ; in ten years since the forced mergers, Montreal has seen 400 000 residents leave town as well as 40 000 businesses. This took the population from 2 000 000 to 1.5 million people and shrinking. What's more, the urban sprawl phenomenon shows no sign of stopping. Stalled salary increases and incessant tax hikes in the province amplifies this exodus toward cheaper endeavors for most Montrealers and businesses. The leaders' solution this time to this new crisis is the redesigning of the urban tissue and of the urban infrastructures to scale down the city core back to its village feel of the first half of the 20th century. Streets are rebuilt narrower ; sidewalks are enlarged ; and pedestrian friendly designs like the new Quartier des Spectacles are the city's gamble to reposition the town for family life and small business market. This new approach has shown encouraging signs of success in its general effect on tourism and small business creation, and almost instantly, the condominium real estate market has revived and is booming right now. But for how long...

The only market that hasn't seen a sharp or continuous decline in the city, unlike manufacturing, transportation and leading technologies is the real estate market. It has shown a strength in the past twenty years despite the economic deflation. Nevertheless, it isn't comparable to Toronto and Vancouver, the countries other large cities. The difference between Canada's three largest cities isn't so much in the number of real estate projects being constructed, but rather in their size and value. Actually, the number of real estate properties being built in Montreal in the last 5 years is one of North America's highest, 3rd ranked behind Toronto and New York only - skyscraper boom -. This is due to two aspects of the market : the city is the continent's most affordable large international city and its livability is real and renowned. This strength in the real estate market just may be the city's lifeboat or its final blow because it is about to change in a major way. In the state of things right now, Montreal is well on its way to living the nightmare of Detroit. At this rate of exodus, the city will be half abandoned and broke in just about thirty years. Hence this new real estate swing will determine what happens next as much as political reforms and infrastructure redesign will. All three are going to largely decide if Montreal is reborn again, or if it breaks definitely like Motown has. In today's blog we illustrate with our pictures Montreal's latest real estate event and what it means for the future - condo market in trouble

The empty lots - open air parking now - of the old east Shaughnessy ghetto area are now prime real estate land. The nearby Concordia district - the city's busiest and most dynamic - and the distinguished NHL hosts Montreal Canadiens Hockey Club and their home arena Centre Bell, have both attracted large condominium tower projects in a small 3 blocks area.

Yet more space is available near and around Guy street just north of the new booming Griffintown. This breathing real estate phenomenon is pulling downtown westward

Some Old classic city icons such as the Maritime Plaza Hotel - above - have found private investments for renovations and market repositioning

English Montreal and Canadian establishment investments have pretty much stalled after the 1976 election of Quebec sovereignty promoting PQ nationalists leaving the west part of downtown from McGill College Avenue to the Westmount Square in a motionless state.

The early millennium e-commerce district project has failed to succeed leaving the business district renaissance idle

Above and below - Canada's largest real estate construction site that will become a totally new neighborhood that we may already call : the Quartier des Canadiens

No less than seven commercial and residential condominium towers from 28 to 50 floors tall are now being erected in this tiny 3 blocks space between Peel and De La Montagne streets. Incomprehensibly, as mentioned above, the condo real estate boom despite the city's stagnant economy has an explanation : a great majority of the condominium units being sold are to foreigners wanting a place in Canada for themselves or members of their family or for market resale. Hopefully for us, there will be a chunk of these new owners who will want to become Montrealers and invest in the community

The current times for Montreal is critical. The real estate market, the political reforms, the infrastructure challenge, the transit redesign strategy and the public finances reform will determine if Montreal lives through yet another renaissance or keeps walking in the steps of Detroit.

Text & Photos : Eric Soucy

FOTOTOURMONTRÉAL is an  >FI3200/ bLOG

tous droits réservés >FI3200/2014 all rights reserved