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Montreal home sales hit record amid speculation of foreign-buyers tax spillover

Christinne Muschi/The Globe and Mail

A record number of homes were sold in the Montreal area last month, the Greater Montreal Real Estate Board said on Tuesday amid concerns that a foreign-buyers tax in Toronto could be having a spillover effect on Canada's second-largest city.

There were 5,057 properties sold in May, a new high for that month and up 15 per cent from a year ago, driven by a hot condo market.

Some real estate market watchers have wondered whether a 15-per-cent tax on foreign buyers in the Golden Horseshoe region, which encompasses the Greater Toronto Area, would drive sales in Montreal.

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Related: Toronto's housing market feels chill from provincial measures

Paul Cardinal of the Quebec Federation of Real Estate Boards said it's too soon to say whether the tax, which was passed by the Ontario government last month and made retroactive to April 21, would have had any impact on transactions.

Still, Mr. Cardinal said Montreal is on track to have one of its best years in terms of home sales, attributing that to high employment growth, more non-permanent residents and improving consumer confidence.

"Demand is strong and listings are going down," he said. "We're back in a seller's market for single-family homes."

Last week, Quebec Finance Minister Carlos Leitao told The Canadian Press he has no plans in the near term to introduce a foreign-buyers tax on Montreal homes, but is open to the idea if one is needed.

While concerns abound about real estate prices in the sizzling markets of Toronto and Vancouver, Montreal remains a relative bargain.

The average price of homes in the Greater Montreal Area rose year-over-year to $368,558 in May, and to $461,345 on the island of Montreal, both increases of 4 per cent. But those prices are still a fraction of what homes go for in Toronto and Vancouver.

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Video: Money Monitor: Home renos on the rise amid soaring house prices (The Canadian Press)
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