A condo boom in Montreal is beginning to attract foreign investors to the city and drive rental prices higher.
“There is right now 150 cranes representing $25 billion of investment in Montreal," Montreal mayor Denis Coderre said proudly at the launch of a new tower development in the city.
According to project developer Kheng Ly, Montreal is an attractive place to invest thanks to its low prices and lack of a foreign buyer’s tax. The recent addition of direct flights between Montreal and China likely also helped, as 35% to 40% of the owners of the new development’s first phase are from Asia.
Those cranes are changing the familiar skyline of the city as condo development begins to encroach upon a market that has traditionally favoured rentals.While the new developments are mostly being built on empty lots or industrial land, according to CBC Brian Salpeter, senior vice-president of development at Cadillac Fairview, the development frenzy has put upward pressure on housing prices in the city.
At the same time, many feel these are all positive signs that the city is growing into more of a global metropolis. Royal LePage realtor Amy Assaad told the Canadian Press that in the last couple of years, she’s seeing more buyers from Europe, China and the Middle East who are attracted to the low prices, university system, transit network and sense of security. "Everything is on our side right now," she said.
There are some in Montreal who believe the city should keep a close eye on foreign buyers. Especially since both Vancouver and Toronto, where foreign buyers have been very active, have both taken steps to reign in foreign purchases of housing.
While there’s no immediate sign that foreign buyers are creating the same pressures in Montreal, all signs are pointing up for the time being in the city’s housing market. It’s expected to be one of the city’s hottest years for real estate on record.
As the Toronto and Vancouver have seen some cooling this year, Montreal could be the next Canadian housing market to watch.