Photo: Jason Baker/Flickr

With the introduction of foreign-homebuyer taxes in Vancouver and Toronto, several reports and data have surfaced about the levies’ impacts on the respective housing markets they’ve been applied to, but has this provided a full picture?

According to the eighth edition of Fortress Real Developments’ Market Manuscript, published Wednesday, the data doesn’t tell the whole story of how foreign buyers affect housing markets and how effective the taxes really are.

“The data that’s being released is still only talking about foreign buyers, they’re not talking about how many resident and non-resident foreign buyers are buying,” Ben Myers, Fortress’ SVP of Market Research and Analytics, tells BuzzBuzzNews.

Myers, who authored the report, takes a deeper look into what he views as being the most important topics in Canadian real estate, including Ontario’s Fair Housing Plan and one of its measures, a 15 per cent non-resident speculation tax for the Greater Golden Horseshoe region.

Similar to the foreign-buyer tax implemented in Greater Vancouver in August 2016, the measure was rolled out in April as an effort to cool the region’s (specifically Toronto) skyrocketing home prices.  

Both the BC and Ontario governments have released data about the number of foreign buyers involved in sales before and after the taxes were introduced, but Myers says critical information is missing.

“It would be nice if they reported on how many are resident and non-residents and how many are students buying and how many foreign-buyer entities sold their units as well,” says Myers.

According to Myers, there is an erroneous perception that all foreign buyers are investors who use their property as a vacation home and otherwise keep it vacant.

But perception is inconsistent with survey results from the Toronto Real Estate Board (TREB), which found 50 per cent of foreign-purchased property is used as a primary residence and 20 per cent is used for investment. Myers included details on the TREB survey findings in his report.

In his own survey conducted on social media, Myers says roughly 37 per cent of respondents in the Greater Toronto Area saw vacant homes in their neighbourhood.

In addition, many foreign buyers are purchasing property overseas for their children to study abroad.

Myers notes that according to, an international property website for buyers in China, educational purposes accounted for 44 per cent and 41 per cent of Chinese inquiries for housing in Vancouver and Toronto, respectively.

Another overlooked fact when analyzing foreign-buyer activity is their prior involvement in the market.

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“We always report on how many foreign buyers have bought units but we never report on how many foreign buyers have sold units, so what’s the net difference?” says Myers.

Knowing what the net increase or decrease in foreign buyer activity is will truly make a difference in determining their impact, he adds.

The big question that Myers addresses in his report is to what extent foreign-buyer activity causes home prices to rise.

According to the analyst, investors abroad contribute to higher prices but account for a smaller percentage than what people generally assume.

Increased demand is going to result in higher prices and foreign buyers are included in this equation, says Myers.

“What we need to continuously do is keep adding supply to match that additional amount of demand in the marketplace,” he adds.

Myers concludes that the foreign-buyer tax was successful in slowing Vancouver’s housing market. However, with the city’s market once again picking up steam, it may be an indicator of how Ontario’s Greater Golden Horseshoe market will react to its own levy in the short-term.

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