The team at North East Mortgages would like to wish our friends the best for the holiday season!
A new year brings promise but many Montreal real estate professionals agree: 2019 should not bring a foreign buyers tax for the city of Montreal.
For one, this wouldn’t be enough to prevent foreign buyers from taking advantage of the city’s housing market, according to North East Mortgages president Terry Kilakos.
“It wouldn’t help because the prices of homes in Montreal are still ridiculously low. If we compare a condo in Montreal versus a condo in Vancouver or Toronto, there’s a huge difference in cost, there’s a huge difference in price,” Kilakos said. “So seeing as there’s this massive difference between the two, it doesn’t matter even if there is a tax, it’s still going to make a lot of sense for people to be buying here.”
Because of this price difference compared to other parts of the country, Kilakos said he’s seeing more foreign buyers as they look to Montreal as the growth market.
In his eyes, the real problem isn’t that people are buying up homes, but that they might leave the city a ghost town by buying up property solely as an investment, leaving the homes vacant.
In the downtown core, the city decided to protect hotels by barring short-term rental services like Airbnb from operating in certain areas, Kilakos said. Montreal may be able to avoid the ghost town effect if it similarly focuses on that goal, rather than a far-reaching tax.
Besides, Kilakos said, aren’t Quebecers already taxed enough?
“This is just another example of how the provincial government and the municipalities are just looking to take advantage of someone who is looking to make some money,” he said.
But the most compelling argument against a rumoured foreign buyers tax by the city of Montreal is this: Only a small minority — less than 2% — of Montreal homes for sale were purchased by foreign buyers, according to data from the Canadian Mortgage and Housing corporation.
While Montreal’s market continues to break sales records, the most recent data shows fewer houses are going on the market, according to a BNN Bloomberg report. New listings dropped 6% in November, compared to the previous year, and active listings dropped 18 % over the same period.
As home sales cool nationwide — down 2.3% from October to November and down 12.6% compared to the same period in 2017 according to November data from the Canadian Real Estate Association statistics — it is crucial for politicians to keep their cool, too.
Photo: Andrik Langfield / Unsplash