While luxury markets in Vancouver and Toronto continue to absorb negative impacts of provincial cooling measures, Montreal is keeping its healthy pace of increased activity, according to a report Tuesday.
During the first half of 2018, the city of Montreal recorded 460 sales over C$1 million (around US$762,500), a 24% increase year-over-year, according to the mid-year top-tier market report by Sotheby’s International Realty Canada.
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“The city isn’t shaken by the foreign buyers tax, which has affected Vancouver and Toronto,” said Brad Henderson, the brokerage’s president and CEO.
While foreign buyers aren’t flocking to Montreal, without provincial or municipal policy interventions, domestic buyers have more confidence in the city, Mr. Henderson said.
The city’s home prices are still a bargain compared to those in Vancouver and Toronto. Plus, “Montreal is a very livable city rich in culture and very close to all the major markets on the eastern seaboard,” which means it attracts a large audience to live and invest there, he said.
In the city of Vancouver, 1,939 homes were sold at and above C$1 million, decreasing 19% compared to the first half of 2017. The slowdown was more pronounced in the single-family home market, which posted a 36% annual decline in sales.
The provincial government of British Columbia imposed a 15% foreign buyers tax in August 2016. The tax was raised to 20% and applied to a broader region in 2018. Along with federal government policies to tighten the housing market, including interest rate hikes and a mortgage stress test, downward pressure has hit home prices and caused market activity to continue to drop, Mr. Henderson said.
Within the City of Toronto, a total of 3,526 residential properties sold for over C$1 million during the first half of 2018, a 32% decline year-over-year. However, 41% of these homes were sold for above asking prices, suggesting a top-tier market resurgence might be underway, according to Mr. Henderson.
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