Foreign investors interested in condos in Montreal

The count of new condominiums in downtown Montreal acquired by foreigners has increased significantly in recent years, partly explaining the current uprise of the real estate market.

Experts sharing their opinion for this article are unanimous: there are more foreign investors in Montreal, especially the Chinese clientele in the Ville-Marie borough. “This is the highest year ever recorded. A real explosion! Remarks Vincent Shirley, Director, Advisory Services, Real Estate and Land Development, Altus Group. Québec’s socio-economic climate, particularly in Montreal, is an appetite for investors. In Greater Montréal, non-domiciled buyers in Canada accounted for only 2.6% for the first three quarters of 2018, but this percentage rises to 11.9% in the borough of Ville-Marie, while it was only 6.4% two years ago.

Economic benefit

Gilles Ouellet, a real estate marketing consultant, is conducting various market studies for developers on the state of health of real estate market in Montréal, particularly for large-scale projects for sale in the downtown area: “We currently have an investor market. Foreign investors buy in Montreal after being ousted from Toronto and Vancouver because of the surtax. We are ten years behind Vancouver or Toronto. “According to Mr. Ouellet, an investor can expect a return of 100% on the purchase of a condominium after three years.

Who are they?

Americans, French and Chinese are the main groups of foreign buyers in the Quebec real estate market. Alexandra Serafini, Director, Dev MgGill Sales & Product Development, meets this international clientele for sales purposes and promotion of the Humaniti project. She identifies three categories of foreign buyers: “families who are attracted by the quality of our universities, wealthy clientele looking to land in Montreal, and finally, buyers from Canada who work and live in Montreal and want a downtown condo with good services. According to Patrice Groleau, a broker specialized in the downtown sectors and owner of real estate agencies Engel & Völkers and McGill Immobilier, Montreal enjoys a very respectable reputation among the Chinese clientele, french speaking and Arabic countries: “This is the Canadian dream, the Boston of Canada with its good universities, restaurants and ecological conditions comparable to that in the Scandinavian countries.”

Chinese buyers profile

Chinese residents is a steadily growing group that will be the top buyers in 2018, according to economist Janie Fontaine, JLR Land Solutions. The economist tempers however: “Even though the number of foreign investors is growing, its presence remains relatively low. Patrice Groleau employs eight brokers of Chinese origin. According to him, it is the commodity of Montreal that attract the Chinese: “They choose the metropolis for air quality, political stability, green spaces, low unemployment. “The Chinese place great importance on being a homeowner, when it is not possible in their country,” adds Mr. Groleau: “They acquire a home in order to settle in Montreal. It is not a speculation, but rather a migratory process.”

Increment?

Canada Mortgage and Housing Corporation (CMHC) has been interested for a few years in the presence of foreigners in Montreal. According to the economist Francis Cortellino, the estimated percentage of foreigner buyers Canada is estimated from the address recorded in the notarial documents, which suggest a greater real presence of foreign buyers, including those who go through a company, for example. CMHC experts have also been studying the possibility of these new players exerting pressure on the market. Economists measured two indicators: the demanded price in relation to the selling price and the proportion of purchases at a price higher than the demanded price. In either case, “foreign buyers do not pay more than the locals” concludes the economist.

Source: Les Affaires