Foreign Home Buyers Switch To Montreal As Home Sales Hit Record
According to Real estate Brokers in Montreal, sales of existing homes reached very high records last Tuesday. Although, the unceasing worries that foreign buyers might be thinking of relocating to Toronto, as augmented taxes continue to be an issue in Vancouver and Ontario.
The greater Montreal Real estate Board said that in May there were 5,057 residential sales, a 15% increase from the previous year making it to the top in 2007.
“Non-resident buyers have been a growing factor in Montreal for some time,” said Doug Porter, chief economist with the Bank of Montreal. It was definitely not apparent since the inflows are not as significant as in Vancouver or Toronto, plus the primary market simply is not nearly as tight as in those other two cities, therefore prices have remained well controlled. Currently, Montreal seems highly affordable globally. Additionally, that by itself might gradually produce more foreign buyer interest. While it is very early to make a statement, certainly there is a good prospect that some flows may now drift down to Montreal from the GTA”
Carlos Leitao, the Quebec finance minister, said his department was observing whether the tax from neighboring Ontario will have a transference effect on the Montreal market. “We just want to be ready if the need arises, then we can do it quickly. However I do not have any plans to do anything in the short-term,” he told the Canadian Press this month.
The Toronto Real Estate Board released a report last Monday which stated that sales were off 20.3% from a year ago in the Greater Toronto Area, whilst average prices dipped 6.2% from April.
Mathieu Bedard, an economist with the Montreal Economic Institute, in a research paper published Tuesday noted “while it is debatable that foreign buying has had an impact on prices in the Vancouver area, the substantiation is far less convincing in Toronto. A tax on foreign buyers is not the definite answer to our bad public policies”.
“I think the question is, does a foreign buyer tax really have an effect?” said Bedard. “We saw in Vancouver the market reduce its pace after the introduction of the tax and then began rising again. These types of taxes have no long-term effect. It’s only politicians who are trying to give the impression of taking care of the problems. On the other hand it does not really affect the fundamental reason why prices are up and that’s a supply problem.”
“Vancouver is now seeing cost and sales skyrocketing again after the province put a 15% tax on foreign buyers in August, 2016. Sales in Greater Vancouver in May rose up to 22.8% from April, while prices surged 8.8% in May from a year ago.” Noted Garry Marr, from the financial post.
J C Loum
