Canada’s second-largest city of Montreal has seen its residential property market start to heat up during 2017.
Following the 15 per cent tax hikes imposed on overseas property investors by local governments in both Vancouver and Toronto, overseas property investors may be turning to Montreal.
Property prices in the city area are on track to rise by 6 per cent this year, which would represent the largest jump since 2010.
The forecast comes from the Quebec Federation of Real Estate Boards, and represents a huge rise from their previous prediction in January of only 1 per cent growth for the region.
Montreal has previously been overshadowed by the surging property markets in Vancouver and Toronto. However, now that foreign-buyer taxes are beginning to curb demand in those cities, Montreal is coming to the forefront.
Cynthia Holmes, a professor of real estate management at Ryerson University in Toronto, commented: ‘I wouldn’t be surprised if Montreal becomes the new target for foreign capital investing in residential real estate.’
She continued: ‘Montreal is the Goldilocks of the Canadian housing market, with Toronto and Vancouver too hot and Calgary too cold.’
Overseas property buyers in the Montreal area represented 1.3 per cent of the total market last year. Still a relatively small percentage, but almost double the 0.7 per cent share of the previous year.
The figure still pales when compared to the 16.5 per cent seen in the Vancouver region before British Columbia imposed a tax in August, according to the province.
However, the Toronto Real Estate Board estimated fewer than 5 per cent of foreign buyers last year in its region, before demand slowed after policymakers introduced a foreign buyers levy this year.
Montreal also is on track to break a seven-year record for the number of properties sold, with 41,500 properties expected to change hands, up 4 per cent from last year, according to the Quebec board, which in January predicted a 5 per cent decline.
Unlike Vancouver and Toronto, Montreal is seen to have a solid supply of property stock to meet demand, implying that prices are unlikely to soar quite as dramatically as the other two Canadian cities.
However, this also encourages stability in the property market, with the Montreal area not seeing a decline in property prices since 1996. A statistic remarkable considering the 2008 global financial crisis.
Desjardins Group chief executive officer, Guy Cormier, who oversees North America’s largest financial co-operative, told reporters in Montreal recently that he doesn’t currently see any need for a foreign buyers tax in Montreal or Quebec.
Property prices in the region do now seem to be hotting up now though.
Eric Goodman, agency executive at Century 21 Vision, commented: ‘We aren’t as crazy as Vancouver and Toronto as far as price increases. But activity is pretty good.’
He continued: ‘The market today seems to have changed. Houses aren’t staying on the market that long, the inventory of quality property is really low and anything priced right is getting multiple offers immediately.’
It seems that the Canadian property boom may yet continue. It is just changing cities.