The province of Quebec is an anomaly in Canada: predominantly Frenchspeaking, governed by a civil law system, and with a distinctly different history of settlement than the rest of Canada. Its land mass is three times that of Thailand, but most of its eight million habitants are tucked away in the south, nestled between the provinces of Ontario and New Brunswick, with the US to the south.
Cosmopolitan Montreal is known for its art and design, joie devivre, and strong European influence. The island city and neighbouring suburbs host half of Quebec's population, making it Canada's second most populous urban centre. Both Toronto and New York City are within a six-hour drive, English is spoken nearly as much as French, and a fifth of the population is trilingual.
As humid summers begin, plant life explodes where there's no concrete. Montrealers expose their skin and drink artisanal beers on outdoor patios – better known locally as terrasses. After short, cool autumns with notorious yellow, orange, and red foliage, temperatures plummet for six months, the land quiets under snow, and the rhythms of Montreal keep pulsating indoors.
Local professionals with average incomes can reasonably expect to secure a first home – meanwhile the market is increasingly diversifying
tensions rose to a head in the 1990s when the population was asked in a referendum whether they wanted the province to separate from the rest of Canada. While gains for both the province and Montreal have been slow in recent years, both separatist fervour and market volatility are at bay. Quebec's real estate markets weathered the subprime mortgage crisis and recession of 2008 and 2009, with overall gains of 5 per cent each year, according to the QFREB.
Other than a condo market favouring buyers, Montreal's real estate market is balanced. The Canadian Mortgage and Housing Corporation (CMHC) projects the city's home values will increase between 1.7 per cent and 3.2 per cent this year.
The same Crown corporation has begun assessing rates of foreign ownership of condos, and last year found that 1.3 per cent of condos in the Montreal region were owned by foreigners, compared to 5 per cent in downtown Montreal. More foreigners, especially mainland Chinese, are buying homes in Westmount, a wealthy, traditionally English-speaking city adjacent to downtown Montreal. Detached homes here usually sell for well above C$1 million, and include the often-granted social status of being a Westmounter.
Overseas investors are also buying condos and luxury townhouses on nearby Nun's Island, as well as condos in downtown Montreal.
YUL is a 38-storey two-tower downtown condo development with significant backing from
MORE FOREIGNERS, ESPECIALLY MAINLAND CHINESE, ARE BUYING HOMES IN WESTMOUNT, A WEALTHY, TRADITIONALLY ENGLISH- SPEAKING CITY ADJACENT TO DOWNTOWN MONTREAL
Plexes are two and three-storey buildings with two to six units. Rows of plexes, street after street, are extremely common in Montreal.
According to statistics from CMHC, the average selling price of Montreal plexes with two to five units increased 16 per cent over the past five years. By comparison, condo prices increased 10 per cent in the same period.
Ho sells properties in downtown, Westmount, the Plateau, and another high-end Montreal neighbourhood called Outremont, and he says he warns his foreign buyers to be careful.
“There's money to be made in Montreal, but investors should do their homework before they buy anything,” he says, adding they should expect to work hard for five to seven years to ensure gains.
He advises absent owners to find a good property management company that will troubleshoot, serve tenants, and ensure snow is removed. Even if a residence is empty, he says, problems like leaking roofs or squatters are a risk.
Quebec City, the province's capital is a distinctly different market than Montreal. Its regional population of 806,000 is primarily French speaking and less culturally diverse than Montreal. The average sale price in 2015 was C$265,000, according to the QFREB, and the CHMA forecasts dismal growth of -3.5 per cent to 1.8 per cent this year. “There's a lot of supply right now in Quebec City,” says CMHA analyst Francis Cortellino.
Meanwhile in Gatineau, a region in western Quebec across the Ottawa River from the Ontariobased Canadian capital, residential property values are expected to rise in 2016 between 0.5 per cent and 2.5 per cent. The average residential price in the region in 2015 was C$244,000. Its population of 331,000 is forecast to grow by 0.8 per cent.
Foreign condo ownership in the Quebec City and Gatineau regions is 0.6 per cent and 1.2 per cent respectively, as estimated by the CMHC in its 2015 study.
Quebec real estate author Martin Provencher encourages his readers to invest horizontally – that is, to buy land, and not buildings. He notes municipal taxes are based on buildings, not land, and unlike buildings, the value of land doesn't depreciate over time.
“In Montreal, one square foot costs about C$250 and higher in the centre of the city,” he argues. “In the country, a square foot costs around C$5 when you're 45 minutes out of the city, and more than an hour out of the city, it can cost less than C$1.”
“Many foreign investors invest in Quebec understanding that the land is the basis of real estate,” Provencher says. “And there's no work to be done: it's an insurance policy. If political tensions or pollution become too unbearable where they live, the investors will have a place to go.”
Cardinal of QFREB offers advice for real estate investment outside of urban centres: “You have to find the next hot area.”
Zoning, population growth, highway and transit infrastructure are all important considerations, he says. Within two hours of Montreal, the Laurentians and Lanaudière regions have the highest population growth in recent years, he says. “Logically, they should be good sectors.”
Certain rules govern foreign property owners in Quebec, including requiring a certificate from both provincial and federal governments stating they do not owe back taxes in Canada when they want to sell. A notary has to withhold 37 per cent of a property's sale price until those certificates are produced. Also, to