Montreal real estate: Immigrants can help raise house prices
Unless prices are up much faster, Montreal real estate will for a long time seem to be a bargain for buyers from elsewhere. ALLEN MCINNIS / MONTREAL GAZETTE
Newcomers to Canada are a strong force in Canadian real estate. Whether they are far away or plan to stay for only a few years while working or studying, they are sure they all need to live somewhere.
According to a recent study by Royal LePage, Canadian newcomers in Quebec are responsible for as much as one fifth of home shopping. At the current rate of international migration, the broker estimates that more than 100,000 Quebec homes will be bought in the next five years.
There are supply problems in Montreal and home builders are not keeping up with demand. If interest rates remain low, the economy remains strong, Quebec's political situation remains stable, and if the world still considers Montreal a desirable destination to work, study or raise a family, then yes, we are likely to continue to see demand outstrip, and that means prices are likely to rise further.
While many locals are greatly imitated by the city's recent property prices, the fact is that there are many trails in Montreal before it even comes close to the cost of Vancouver or Toronto. Unless prices are up to speed, our real estate will look affordable for buyers from elsewhere for a long time.
The Royal LePage survey interviewed 1,500 people who had come to Canada in the last 10 years. It included residents such as students, temporary workers and refugees, but not international non-resident buyers. The study defined "newcomers" as people who moved to Canada in the last 10 years.
Three-quarters of newcomers surveyed said they arrived in Canada with bank money to make a possible home deposit, and 82 percent put their roots where they first arrived. (Contrary to popular belief that most of the newcomers here are leaving for other provinces, 83% of Quebec arrivals said they decided to stay.)
Preliminary StatsCan numbers show that more than 90,000 newcomers arrived in Quebec last year. Approximately half of them are permanent residents or refugees who have taken up temporary employment or study there. While most start with renting a home, both the Royal LePage study and UBC geography professor Dan Hiebert's study point to many of those staying overnight, eventually buying property here.
Hiebert has studied the effects of zero immigration on housing markets. Although he is still screening the 2016 Census data, he said the results of the Royal LePage survey are in line with the trends he found in the 2011 National Household Survey.
With only about a quarter of Quebec immigrants buying a home within five years of arriving, Hiebert found that because more time, newcomers to Canada were more likely to become home buyers than the average Canadian-born.
Hiebert found that home shopping habits differed greatly depending on the origin of migrants and the way they arrived. Some groups of newcomers bought the house without mortgages, while others clearly saw the difficulty in finding affordable housing in Canada.
Hiebert found that newcomers who came from Southeast Asia, China, or Korea in Montreal found Hiebert a home, but newcomers from Saudi Arabia, Latin America, West Asia (including Iran, Armenia, Afghanistan). and Turkey) and people in African or Caribbean countries are most likely to rent.
Thirty-two percent of immigrants enrolled in a family reunification program bought a home in Canada within the first five years. A quarter of the migrant investor or skilled worker candidates were able to enter the real estate market during this time, while only 14 percent of Canadian refugees were able to do so.
Even Montreal refugees, who may have arrived with little but no clothes on, eventually managed to save on the down payment. Hiebert found that they were more likely to buy a home.
While only 13 percent of Montreal refugees were able to buy a home in five years, more than 60 percent owned a home in 20 or more years, Hiebert said. This is higher than the overall Montreal household rate, which was 55 percent in 2011.
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