With the Greater Toronto Area’s $1 million-plus home sales dropping since the foreign buyer tax, and Greater Vancouver’s high-end sector only just recovering, where has the money for luxury home purchases been spent this past spring and summer?

The answer is – at least partly – in Montreal, where July and August sales over $1 million surged 60% over the same months in 2016 to 115 properties (condos, attached and single-family homes), according to a September 19 report by Sotheby’s International Realty Canada.

The report said, “Strong job gains and a healthy economy [in Montreal] lifted local consumer confidence and fueled luxury market activity that resulted in soaring activity, an lift in prices, and an increase in the incidence of bidding wars in several of the city’s prime, luxury neighbourhoods.”

It added, “Montreal’s luxury market remains dominated by local demand, however, industry insiders anecdotally report an uptick in interest from foreign buyers seeking residences.”

However, even though the percentage rises are sharper in Montreal, the absolute numbers remain far below that of the GTA and Greater Vancouver, so the Quebecois city is merely playing catch-up.

In the GTA, summer sales of over $1 million (all property) fell 39% year over year to 1,926 properties sold in July and August, and luxury sales over $4 million were 29% lower at 35 units sold. Sales of most home types have declined since the Ontario Fair Housing plan – which included a 15% foreign buyer tax like the one introduced in Vancouver – was launched this spring.

About nine months further into its own foreign buyer tax than the GTA, Greater Vancouver home sales above $1 million (all home types) in July and August were up 5% compared to the same months in 2016. For condos alone, that increase was 36%. However, luxury real estate sales over $4 million in those two months were down 21% to 46 units.

Sotheby’s predicted further recovery in the $1 million-plus Vancouver market. “This fall, home buyers and sellers who waited on the sidelines over the previous year are expected to return to the top­tier market. Constrained by a lack of options and motivated by demographic needs and lifestyle preferences, this activity is projected to fuel heated high-­end condominium demand in the months to come.”

Brad Henderson, president and CEO of Sotheby’s International Realty Canada, was bullish about the the performance of all the major markets. He said, “The country’s exceptional economic performance is expected to elevate top-­tier real estate market confidence and performance this fall. Montreal, in particular, is emerging as an unexpected bright light on Canada’s luxury real estate horizon, but the reality is that improvement in economic productivity, wages and job gains will be positive for all of our metropolitan markets in the coming months.”