Chinese interest growing in our real estate

Realtors and other real estate professionals have been noticing an increase in the number of buyers from China in the past year or so. A new analysis released this month indicates these observations are not just anecdotal.

It used to be that most nonresident buyers were coming from France or the United States. Now, they are more likely to come from China.

A report from the Canadian Mortgage and Housing Corporation (CMHC) looking at sales this year (from January to August) found the number of homes purchased in Montreal by non-resident buyers from China has grown more than 64 per cent compared with the same period last year.

Two years ago, Chinese buyers represented about 10 per cent of all transactions by non-residents in Montreal. Last year, it was 20 per cent.

So far in 2018, it’s closer to 30 per cent.

Meanwhile, data provided by Juwai, a leading Chineselanguage online real estate portal for international buyers, indicates interest from Chinese buyers in Montreal real estate has hit a new peak.

Inquiries on Juwai into Montreal properties have been growing steadily since last year, but set a record in August with a dramatic spike in activity. Although the level of interest declined slightly in September ( by 9.5 per cent), it still represented twice the number of inquiries compared with the same month last year.

Overall, inquiries were up 20 per cent this year compared with 2017.

It’s worth noting, that’s inquiries on listings, not views. These aren’t looky-loos. These are people who are preparing to buy.

Chinese buyers bought more than $55 million of residential real estate in Montreal in 2017, according to Juwai CEO Carrie Law.

Based on the spike in the number of inquiries into Montreal properties, she estimated the value of real estate transactions involving buyers from China could be as much as 25 per cent higher in 2018.

The overall number of transactions involving non-resident buyers in the Montreal CMA remains low, estimated by CMHC at only two per cent. But the impact of foreign buyers is not felt evenly throughout the CMA; sales tend to be concentrated in a few specific markets.

According to CMHC economist Francis Cortellino, three quarters of foreign buyers bought condos within the city core. More than one in 10 condos bought in Ville-Marie this year were sold to buyers with an address outside Canada.

When it comes to buyers from China, the pattern is slightly different. While most still ended up with a condo in the city, about one in five chose to buy in one of the de-merged municipalities, most commonly in Westmount, Beaconsfield, Kirkland, PointeClaire, Côte- St-Luc and Town of Mount Royal.

Cortellino said around six per cent of all real estate transactions in Westmount since January 2016 have involved foreign buyers. In the de-merged municipalities, about four per cent of sales this year involved non-resident buyers from China.

Cortellino said it’s important not to confuse foreign buyers with immigrant buyers. According to the most recent data available, 40 per cent of homes on the island of Montreal are bought by immigrant households, including both new arrivals and those who have lived in Canada for many years.

“In the report, we mention that it is possible that immigrants, in the general perception, are occasionally confused with non-resident buyers. This could create the false impression that non-resident buyers are a much larger group than they really are on the Montreal real estate market,” Cortellino said.