June 22, 2017 1:56 pm

Foreign home buyers surge in Montreal as Chinese continue to buy

Mon, Oct 3: The federal government announced Monday that they intend to stabilize housing markets across Canada by closing a tax loophole used by foreigner buyers. As Eric Sorensen reports, they will also bring in a mortgage stress test, making sure borrowers can sustain interest rate hikes.

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Canada’s federal housing agency says the number of foreign buyers in the Montreal area surged by 37 per cent in the first four months of the year.

READ MORE: A foreign buyers tax enjoys strong support right across Canada: report

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The 236 purchases by foreigners accounted for 1.8 per cent of all real estate transactions from January to April, the Canada Mortgage and Housing Corp. said in a report.

READ MORE: Vancouver home prices may have finally shaken off foreign buyers’ tax: index

That’s up from 172 deals representing 1.3 per cent of total sales a year earlier during the same time period.

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By comparison, home purchases by foreign buyers in the Vancouver area have hovered around three to four per cent of all transactions since the introduction of a 15 per cent foreign buyers’ tax last August.

READ MORE: Toronto-area home sales drop in May after province introduces foreign buyers’ tax

In the Toronto area, about five per cent of transactions were made by foreigners before a tax was added in April.

WATCH BELOW: Some provinces in Canada have already introduced a foreign buyer’s tax

Buyers from China accounted for the strongest growth in Montreal, representing 17 per cent of all foreign buyers, up from less than 10 per cent in the first quarter of 2016.

READ MORE: Ontario finance minister can’t say if foreign buyer tax will affect GTA housing market

The number of buyers from China more than tripled since the adoption of the Vancouver tax, while the number of French and American buyers increased by about 33 per cent.

READ MORE: Vancouver real estate could experience ‘market whiplash’ as home sales jump: report

Condominiums were the first choice of foreign buyers but 40 per cent of Chinese buyers selected single-family homes.

The median price they paid for these homes was about $720,000 while 25 per cent exceeded $1 million, far greater than prices paid by American and French buyers.

© 2017 The Canadian Press

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