MONTREAL—Average Montreal island home prices hit a record high of almost $500,000 in October, rising 12.7 per cent from the prior year, the area’s real estate board said Monday.

Single family homes in the city and suburbs saw price increases of 10 per cent to nearly $630,000, condos were up 14 per cent to more than $370,000 and buildings with two to five units grew 15 per cent to $583,801.

Average prices in the city of Montreal rose at least 13 per cent in all three categories.

Still, Canada’s second-largest city and area remain a real estate bargain even as average prices were up 9.2 per cent to $386,911 from $354,163 a year ago.

That compared to $780,104 in Greater Toronto, up 2.3 per cent from the prior year and $1.04 million in Greater Vancouver, up 12.4 per cent.

Paul Cardinal of the Quebec Federation of Real Estate Boards attributed monthly housing gains this year to strong job creation, consumer confidence, low unemployment and foreign migration.

“Employment is on fire in Montreal,” he said in an interview.

With consumer confidence reaching a 10-year high, people are viewing it as a good time to make a major purchase like a house.

“They have confidence that it’s a good time to buy because of their expectation about their job, about their revenues, about interest rates and about the market itself.”

Last month was the most active October in eight years as the number of homes sold in the month increased 7 per cent to 3,270, the real estate board said.

Greater Montreal homes also sold more quickly.

Single family homes sold last month were on the market on average for 78 days, almost two weeks less than a year ago.

Plexes spent an average of 81 days on the market, three days fewer than last year. Condominiums took the longest to sell at 103 days, but that was 17 days fewer than in October 2016.

“The single-family home and plex markets are becoming increasingly favourable to sellers, as selling times for these property categories are falling,” said Mathieu Cousineau, president of the Greater Montreal Real Estate Board.

The strong activity came ahead of the federal government’s plans to tighten mortgage requirements.

The Office of the Superintendent of Financial Institutions will implement new lending guidelines at the beginning of next year. Among the changes being considered is a requirement that homebuyers who do not require mortgage insurance still have to show they can make their payments if interest rates rise.

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Cardinal said there is anecdotal evidence that some buyers are moving up purchases to beat the changes. However, he doesn’t believe there will be much impact on housing activity in the city.

Note to readers: This is a corrected story. An earlier version included incorrect average sales prices.