Montréal has officially displaced Toronto and Vancouver as the hot housing market for Chinese nationals after foreign buyer taxes lessened homebuyers’ interest in those two markets.
Citing Juwai.com, a Chinese website for people looking to buy overseas property, The Canadian Press revealed that Chinese buyers made inquiries into about US$1.45 billion worth of Canadian properties in 2017. Interest in Montréal increased by 84.5% in 2017 and 43.3% in 2016.
Vancouver inquiries, meanwhile, saw an 18% decrease last year after increasing by 9.3% in 2016. And in Toronto property interest dipped by 25% in 2017 after increasing nearly twofold in the two years prior.
This pullback is pinned on the foreign buyer levies imposed by the government. Since 2016, Metro Vancouver has levied a 15% tax on foreign home purchases. A similar tax has been introduced in Victoria and Nanaimo, as well as the Fraser Valley and central Okanagan, where the new provincial government raised the tax to 20%.
Additionally, a 15% tax was enforced in the Greater Golden Horseshoe area on buyers who are not citizens, permanent residents or Canadian corporations.
Juwai’s report said that property price hikes were unfairly attributed to Chinese, highlighting other factors at play such as historically low interest rates and population growth.
“After retreating from an exuberant peak in 2016 of US$101.1 billion, Chinese international real estate investment again appears to be on a growth path, although more steady and restrained [than] what we saw in that golden year,” Juwai said.
Re/Max Realty Realtor Mike Donia, who specializes in Asian buyers, said that he has not seen any weakening interest in Toronto real estate.
The foreign buyers tax initially affected “mom and pop” buyers’ choices, he said, noting that most Chinese will just purchase through a corporation to dodge the penalty.
“Ontario attracted the most interest with inquiries for US$500 million worth of properties. The top four cities were Toronto, Ottawa, Waterloo and London. British Columbia followed, with US$328 million lead by Vancouver and followed by Victoria, Richmond and Kelowna.”
“Quebec attracted US$112 million worth of property views. The largest interest was in Montréal and then Lachenaie northeast of Montréal , Laval and Westmount.
“Inquiries in Alberta increased almost nine per cent last year, worth US$56 million, after increasing by 223% in 2016.”
Related stories:
Toronto home sales' hit 14 month high in June
Why Toronto's affordable housing doesn't live up to its name
