Real estate: 30% jump of foreign investors in Montreal


According to the Canada Mortgage and Housing Corporation (CMHC), 425 foreign investors acquired a property in Greater Montréal during the first six months of 2017, an increase of nearly 30% over the previous year. Same period last year. This increase can be explained, among other things, by the enthusiasm of the Chinese for the metropolis.
A text by René Saint-Louis
The increase in the number of foreign buyers is not as marked as that of 2015 to 2016, which was 60%. But new data from CMHC confirm that it continues.
The 425 foreign buyers accounted for only 1.3% of all real estate transactions between January and June 2017. For the same period last year, there were 330, or 1% of total sales, The federal agency.
By way of comparison, there are about 5% foreign buyers in the Greater Toronto Area and a little less in Vancouver, between 3% and 4%. But foreign buyers now have to pay a 15% tax when they buy a property in these cities.
CMHC believes that these taxes are pushing "very slightly" the Chinese towards the Montreal market. Their number has doubled in one year.
The profile of investors is also changing a bit. There are more and more investors coming from China, whereas at the time it was France and the United States that dominated.
Francis Cortellino, Chief Analyst at CMHC
An impact on prices?
According to Paul Cardinal, an analyst at the Quebec Federation of Real Estate Boards, the number of foreign buyers remains too low for this to have a significant impact on property prices.
He pointed out, however, that the Chinese community tends to regroup in certain neighborhoods, which can raise prices locally.
He gives the example of the cities of Westmount and Mount Royal, which are currently popular with Chinese investors.
He recalled that the factors that raise the price of real estate are demographics, disposable income and interest rates. The supply also has a significant impact and is, he says, abundant in Montreal, among other things because of the many vacant lots.More foreign buyers in the Montreal market
Joined in Shanghai, China, real estate broker Colin Bogar is seeing an increasing interest of its customers for the Montreal market. On its Property Passbook online platform, Montréal is now in 10th position in the most sought after cities.
Colin Bogar points out that he has seen an increased interest in Montreal even before the cities of Vancouver and Toronto impose a 15% tax on foreign buyers in order to curb real estate speculation.
According to him, it is the attractions of Montreal that attract the Chinese. It gives examples of reputable universities, the economic upturn in the city, the appeal of both official languages ​​and the better transit system than in Toronto and Vancouver.
Take his place
This analysis is shared by the professor of strategy at the UQAM School of Management Sciences, Unsal Ozdilek, for whom Montreal must take its rightful place on the international capital markets.
According to him, Montreal lags far behind other major cities in the world. The city however has attractions that have great value as the quality of air and water, landscapes as well as safety.
Unsal Ozdilek acknowledges that a possible price increase could have an impact on the first buyers, but those who already own it would benefit.