Foreign buyers are starting to drive up home prices in Quebec

Foreign buyers of real estate in Quebec are putting “marginal” pressure on prices while still accounting for a tiny sliver of the market relative to Vancouver and Toronto, according to new data released by the French-speaking province.

Non-Canadian residents generated 1,307 property transactions in Quebec last year, representing 1 per cent of all deals, finance ministry documents show. That’s little changed from 2008, when they made up 0.8 per cent of the total. Foreigners mostly purchased high-end properties, averaging $559,000 (US$434,343) apiece, the finance ministry said Tuesday.

U.S.-based buyers made up the biggest share of foreign acquirers with 32 per cent of all transactions. French buyers were next with 20 per cent, followed by Chinese nationals at 16 per cent. That’s a marked contrast from 2006, when Chinese residents accounted for just 1.3 per cent of all foreign home transactions in Quebec.

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Quebec recently began tracking and releasing data on the country of residence of home buyers following a decision by Ontario and British Columbia to impose taxes on foreign buyers.

“When we look at average prices in the Montreal area, compared to other places in Canada, they are still relatively affordable,” Quebec Finance Minister Carlos Leitao said Tuesday in Quebec City. “I don’t think we are at all in the same type of position as our neighbours in Toronto or Vancouver. There is no need, in our view, to consider any sort of more intense measures.”

Last year’s land-registry data — compiled by JLR Solutions Foncieres — show foreign buyers bought single-family homes that were twice as expensive on average as those acquired by Quebec residents, the finance ministry said. Co-ownership properties acquired by foreigners were 40 percent more expensive than those bought by Quebeckers, the ministry also said.

Foreigners accounted for just 1.4 per cent of housing deals in Montreal last year, compared with 3.2 per cent in Toronto and 3.5 per cent in Vancouver, according to budget documents.

Bloomberg.com