The mayor of Montreal expects Air Canada's decision to introduce direct year-round service to Japan will increase foreign real estate purchases but he's not worried it will lead to price spikes seen in Toronto and Vancouver.

"We don't have the same situation," Denis Coderre said Wednesday at a news conference announcing flights set to begin next June.

"There is room to have more (foreign) ownership but at the same time the vast majority are from our own people who have been buying more and more."

Montreal is arguably one of Canada's hottest market these days. Prices for a single-family homes were up eight per cent last month as sales increased 16 per cent compared to a year ago.

Purchases by Chinese nationals have surged since direct flights between Montreal and Beijing started in 2015, with Shanghai added last February.

The number of homes purchased by foreigners in Montreal increased by 62 per cent during the first nine months of 2016, but they still only account for about 1.5 per cent of all transactions, according to the Canada Mortgage Housing Corp.

Housing sales have cooled in Toronto and Vancouver since they introduced a 15 per cent tax on foreign buyers in an attempt to rein in price hikes.

Coderre says the direct service to Tokyo will generate economic returns beyond tourism.

"Each time that we announce a direct flight, it has a direct impact on our economy because it increases our wealth and our capability to play a role even more important," he said.

The country's largest airline will operate year-round service to Narita airport.