Foreign buyers are pushing into Montreal's real estate market in increasing numbers but they remain a limited part of the property picture, new data from Canada's national housing agency confirms.
Some 235 foreign buyers snapped up property in the Montreal area from January to April this year, a 40-per-cent jump from the first four months of 2016, the Canada Mortgage and Housing Corp. (CMHC) said in a research note Thursday. That continues an upward trend from last year as a whole, when there were 60 per cent more buyers than in 2015.
The increases are large in percentage terms and signal a continued interest by people outside Canada in Quebec's largest city. But they are small when considered as part of the wider market, with 235 buyers representing just 1.8 per cent of all residential real estate transactions.
"A slight shift in demand from Vancouver to Montreal may have occurred after the introduction of the foreign buyers' tax on housing in Vancouver" in August, 2016, the housing agency said. Given the introduction by Ontario of a similar tax in April of this year, the agency said it will continue to follow the situation closely over the coming months.
Prices in Montreal climbed by 6 per cent in May compared with the same month last year and sales volume set a record for the month with 15-per-cent growth, according to the Québec Federation of Real Estate Boards. The federation says Montreal's market is being driven by demand from local buyers in an economy with record low unemployment and low interest rates, not by foreign-based purchasers.
Buyers from the United States and France still make up the largest pool of foreign buyers in Montreal, according to the CMHC data. The housing agency noted that the number of Chinese buyers in Montreal more than tripled to 100 over the eight-month span after Vancouver's tax was introduced compared with the same span the year before.
Condominiums remained the first choice of property type for foreign investors in Montreal, the CHMC said. Chinese buyers were more inclined than buyers from the United States and France to opt for single-family homes.