CMHC releases updated foreign buyer stats

Could this market be the next to implement a foreign buyer tax?

CMHC releases updated foreign buyer stats
Foreign buyers are showing increasing interest in the Montreal market, according to the Canada Mortgage and Housing Corporation.

The foreign buyer segment showed strong growth in 2016, which has continued into 2017, with 235 foreign buyers recorded in Montreal from January to April of this year.

That represents a nearly 40% year-over-year increase for the same period a year prior.

Despite the growing overseas interest, foreign buyers still account for a very small portion of Montreal’s real estate sales.

“Although the number of foreign buyers has continued to increase in the Montréal area since the beginning of 2017, purchases by foreign buyers represent only about 2% of all transactions in the residential market,” Francis Cortellino, principal market analyst, Canada Mortgage and Housing Corporation, said.

Chinese buyers, in particular, showed great interest in Montreal real estate this year, according to CMHC, which published the report based on the Government of Quebec land register data.

They now represent 17% of all foreign buyers -- which, as mentioned, make up 2% of total transactions -- in Montreal’s residential housing market, up from 10% a year ago.

“From January to April, 2017, 40 percent of Chinese buyers opted for single-family homes compared with 28 percent for U.S. buyers and 17 percent for buyers from France,” CMHC said in its report. “Buyers from China also more often chose homes in the municipalities of the Island of Montréal surrounding the city of Montréal than buyers from the U.S. or France.”

The growing interest could be related to Vancouver and Toronto’s implementation of respective 15% sales taxes on overseas buyers within their markets, which could force foreign interest elsewhere.

It remains to be seen whether or not Montreal follows suit; but with a mere 2% market share being bought by foreign buyers, their influence on the market doesn’t appear to be significant.

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