An increasing number of foreign buyers have shown interest in condos in Montreal because of its significantly cheaper real estate market in comparison to cities like Vancouver and Toronto. According to real estate experts, Chinese buyers in particular are getting inexpensive condos instead of homes that usually come with a heavy price tag.
“The main interest is low-level condos,” said Dominic St-Pierre, Senior Director of Royal LePage for the Quebec region.
What’s happening in Montreal, although it’s good news, doesn’t really compare to what happened in Vancouver and Toronto, where foreign buyer tax was introduced to try to slow the dramatic growth of real estate. Only one per cent of the luxury properties sold for more than $1.5 million were bought by a Chinese buyer, added St-Pierre.
According to a survey conducted by the Canada Mortgage and Housing Corporation, a bulk of the foreign buyers are from the United States and France, while the Chinese only made up about eight per cent. Meanwhile, five per cent of that is from Saudi Arabia.
St-Pierre added, there are two types of Chinese buyers: those looking to move here or get a place for one of their children, and those who “are just purely investors and hoping to make a profit.”
The new direct flight from Montreal to Beijing may have contributed to the increased number of potential investors from China, suggested St-Pierre. However, he cautioned that the new mortgage rules are likely to temper these new business.
A look into the bigger picture reveals that Montreal’s housing market strengthened over the past year. The average price of a home increased by 4.9 per cent, making the jump to $352,798. The average price of a two-story home in Montreal has increased by 5.7 per cent in the third quarter of last year, compared to the third quarter of 2015. It reached $443,239.The average price of a bungalow, on the other hand, increased by 3.2 per cent to $287,198.
Measures are being taken to stabilize the market for condos in Montreal, including limiting foreign money coming into Canadian real estate. But, only time will tell what the impact foreign buyers have on Montreal’s real estate market will really have.