Photo: James Bombales
How many foreign buyers are investing in Canadian real estate? Not as many as you’d think
After much speculation about the effects of foreign buyers on Canada’s hottest real estate markets, the results are in — and they might not be what you’d think.
Non-residents of Canada — otherwise known as foreign buyers — account for less than 5 per cent of housing in the GTA and the GVA, according to a joint report from Statistics Canada and the Canada Mortgage and Housing Corporation (CMHC), released today.
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The data comes on the heels of the implementation of Ontario’s foreign-buyer tax in April, which was introduced as many industry players raised fears about foreign investment driving up prices and worsening affordability. BC introduced its own tax for the GVA in April 2016.
The data from the report found that non-residents owned a mere 3.4 per cent of all residential property in the GTA, and only 4.8 per cent in the GVA The numbers were highest in the condo market, however, with Toronto coming in at 7 per cent, and Vancouver at 8 per cent.
“The phenomena of non-resident ownership is most pronounced for condo apartments,” said CMHC chief economist Bob Dugan in a conference call this morning. “But what we’re seeing is that the share of condos owned by non-residents remains low and stable.”
It’s a sentiment shared by Toronto-based realtor Ralph Fox. “This data completely lines up with everything I’ve seen in my work,” Fox tells BuzzBuzzNews. “There’s been this great hysteria about foreign buyers, and policymakers have rushed in to try and appease it. But we’re undergoing an affordability crisis that is being driven by fundamentals — it’s a supply problem.”
Urbanation senior VP Shaun Hildebrand agrees, although he says that the data likely isn’t telling the whole story.
“I think it’s important to point out that this likely isn’t capturing all foreign households,” he tells BuzzBuzzNews. “There are ways of masking foreign ownership that these studies can’t account for, and that’s why it’s important to keep monitoring these numbers.”
Hildebrand also wants to know more about what foreign buyers are doing with their investments. “Are they holding onto them, or are they buying and flipping them quickly?” he asks. “This could help to shed some light on the situation. The numbers don’t sound particularly high, but they aren’t insignificant.”
Fox believes that, foreign buyers or no, Toronto and Vancouver’s housing markets aren’t going to become affordable anytime soon.
“Toronto’s market is heating up again, just like Vancouver’s did once the psychological effects of their tax started to wear off,” he tells BuzzBuzzNews. “These numbers confirm that Toronto is headed in the same direction.”