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Non-residents focus on new condos in Vancouver, Toronto
[OTTAWA] Foreign ownership of housing in Canada's two largest markets, Toronto and Vancouver, is below five per cent, Statistics Canada said on Tuesday in a report that suggests foreign investors are not the biggest factor driving up home prices in Canada.
Non-residents owned 3.4 per cent of Toronto residential properties and 4.8 per cent of Vancouver's housing stock as of mid-2017, Statscan said. But when new-built condos were isolated, the number of non-resident owners jumped sharply, suggesting overseas investment is driving the hottest segment of the market.
Non-residents, defined as those whose principal residence is outside of Canada, owned 15.5 per cent of condos built in 2016-2017 in Vancouver, and 11.3 per cent in Toronto, Statscan data showed.
"These numbers confirm what a lot of people have been suspecting is happening, particularly in new-builds," said Andy Yan, director of The City Program at Simon Fraser University in Vancouver, who first noted the trend. Reuters confirmed the findings with Statscan.
Mr Yan also said the data does not fully capture the impact of foreign money, nor the impact of domestic and foreign speculation, because it focuses on the owners, rather than where the money comes from.
A voter backlash against foreign buyers, particularly those from China, spurred provincial governments to impose a 15 per cent tax on home purchases by non-residents in Vancouver in 2016 and Toronto in 2017.
The report showed non-residents owned more condos than detached homes, and tended to own more expensive homes than those owned by residents.
The report also showed non-residents tended to own newer and smaller condos in Toronto than those owned by residents, which has been blamed for fuelling a building boom of small condos designed for investors, not residents, in mind.
The data is likely to spur continued debate about the housing booms in Toronto and Vancouver, which cooled after the foreign buyers tax was imposed but have shown some signs of a rebound since.
Prices surged 173.7 per cent in Vancouver from January 2005 to November 2017, according to the Canadian Real Estate Association's housing price index, while Toronto prices are up 145 per cent in the same period. In the last three years alone, Vancouver prices have risen more than 60 per cent, while Toronto prices are up more than 40 per cent, sparking fears of a bubble.