Provincial policy measures targeting foreign buyers have been fully absorbed in Toronto and Vancouver’s luxury housing markets, but have led to heightened demand for similar properties in Montreal, according to a new report by Royal LePage.
“Provincial measures to dampen foreign buyer activity in Toronto and Vancouver have increased demand for luxury property in Montreal, but this demand is mostly seen within the downtown condo market,” said Marie-Yvonne Paint, a real estate broker with Royal LePage Heritage, in a release Thursday.
“We are seeing an increase in demand for presale condo units where investors will buy several units to benefit from a discount.”
Luxury detached home and condo sales in Montreal surged 21.4 per cent and 28.9 per cent, respectively, in the 12-month period ending Jan. 31, the report said.
Meanwhile, luxury home sales in Greater Vancouver declined 50.5 per cent and 40 per cent in the Greater Toronto Area during the same period. At the same time, luxury condo sales in Vancouver decreased 32.2 per cent and declined a modest 3.4 per cent in Toronto.
Royal LePage Real Estate Services Ltd. Chief Operating Officer Kevin Somers said that while the luxury market in the once red-hot regions cooled last year, the real estate firm expects an increase in luxury activity in both markets in 2019.
“Price reductions and increased selection in Greater Vancouver are expected to stimulate the luxury property market while an expected return to more normal activity in the Greater Toronto Area will be a marked improvement over last year’s spring market,” he said in a release.
Among the country’s five biggest cities, Royal LePage expects to see the strongest appreciation rate in Montreal.
A 15-per-cent foreign buyers’ tax was introduced in Ontario in April 2017 under the previous Liberal government as part of their Fair Housing Plan. A similar tax took effect in British Columbia less than a year earlier.