An increasing number of Chinese buyers are showing an interest in Montreal, drawn by the relatively affordable housing market compared to Toronto and Vancouver, real estate agents say.
Dominic St-Pierre, senior director of Royal LePage for the Quebec region, said the bulk of buyers are purchasing inexpensive condos — not high-priced homes.
"People assume that it's going to be luxury buyers, but the main interest is low-level condos," he said.
"It's not all the Chinese buyers that are extremely, extremely rich."
For now, St-Pierre said, what's happening in Montreal isn't anywhere close to what's unfolded in Vancouver, which recently introduced a foreign buyer tax in an attempt to slow growth.
Of the luxury properties — defined as those that sell for more than $1.5 million — sold last year, only about one per cent were purchased by a Chinese buyer, he said.
"We don't think it's going to be much more in 2016," St-Pierre said.
According to a recent survey by the Canada Mortgage and Housing Corporation, residents of the United States and France accounted for the majority of foreign buyers in Montreal, while China accounted for eight per cent and Saudi Arabia accounted for five per cent.
There are two types of Chinese buyers, St-Pierre said: those looking to move here or get a place for one of their children, and those who "are just purely investors and hoping to make a profit."
Growing link with China
St-Pierre suggested a new direct flight linking Montreal and Beijing, established in September 2015, may have contributed to the increased presence of potential buyers from China.
He cautioned, however, that "we're very far from a hot market," adding that the new mortgage rules will likely temper purchases.
Overall, Montreal's housing market strengthened over the past year, with the average price of a home increasing 4.9 per cent to $352,798, a Royal Lepage survey released Thursday said.
According to the survey, the median price of a two-storey home in the Montreal area increased by 5.7 per cent in the third quarter compared to the same quarter in 2015, reaching $443,239, while the median price of a bungalow increased by 3.2 per cent to $287,198.
The findings come just one day after federal Finance Minister Bill Morneau touted new measures to stabilize housing prices across the country, including limiting foreign money coming into Canadian real estate.
Those measures also include a new "stress test" for insured mortgages to make sure borrowers are still able to make their payments if the big banks' five-year posted mortgage rates climb.
"We need to stay focused on the risk to Canadian families in housing," Morneau said.