(Photo credit: Gary J. Wood/Flickr)
With housing prices on an upward trend for years, one common explanation is that there’s been an influx of foreign investors affecting the real estate market.
Recently, the CMHC published the rates of foreign ownership invested in Canada’s condo market in 11 major markets and the numbers might surprise you.
Vancouver and Toronto, which are seen as hot spots for foreign investors, had rates of 2.3 per cent and 2.4 per cent respectively, while Montreal had foreign ownership of 1.5 per cent.
There were higher rates of foreign home ownership in downtown areas of some metropolitan cities, such as downtown Montreal and Nun’s Island in Montreal, which boasted 6.9 per cent, Burrard Peninsula in Vancouver, which boasted 5.8 per cent, and Toronto’s downtown core, which boasted 4.3 per cent.
But when the overall foreign ownership rates of these cities were considered, Toronto had the highest proportion of foreign condo investors, which was also higher closer to postsecondary institutions such as the University of Toronto and Ryerson University.
Other cities, such as Victoria had 1.1 per cent of foreign investors, Ottawa had 0.7 per cent, Quebec City had 0.6 per cent and Saskatoon had 0.3 per cent.
This is the first time the crown corporation has published this data, which was obtained by asking property managers for the number of condo units with owners who have a permanent residence outside of Canada.
With some housing prices in Canada exceeding the prices of international cities, such as Rome, many investors – foreign and domestic – may see housing within our nation as a good investment opportunity.
Reurbanization seems to be the bigger trend that looks to be driving the demand for the many condos that are popping up downtown with many Canadians looking to live within the city and downtown cores rather than commute in.
But not everyone agrees with the CMHC’s assessment with real estate developer Brad Wall telling the Financial Post that those numbers aren’t similar to what he’s seen in his sales office. Also, CIBC’s deputy chief economist Benjamin Tal pointed out that it depends what’s considered a foreign investment since there may be cases where someone may have bought property in Canada, but the money to fund that purchase is coming from abroad.
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