Photo: James Bombales
How much is foreign investment to blame for sky high prices in Canada’s hottest housing markets? Right now it’s unclear — but it won’t be for long.
That’s because next week Statistics Canada will release a highly-anticipated report on foreign investment in Toronto and Vancouver, a project that’s been five years in the making, and cost a cool $39.9 million to undertake.
Currently, the Canada Mortgage and Housing Corporation (CMHC) says that foreign investment accounts for just 10 per cent of total Canadian home sales activity. Several industry organizations have been vocal in their belief that foreign buyers are not behind the spike in prices.
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“It’s un-Canadian to blame foreigners for affordability concerns caused by a lack of supply in the market,” Mortgage Professionals Canada wrote in March.
Nevertheless, concern about foreign investment driving up prices led both the BC and Ontario governments to introduce foreign buyer taxes (in August 2016 and April 2017, respectively.)
While sales in both cities took a dive after the introduction of the taxes, both have slowly made their way back up, with Vancouver prices now sitting at pre-tax levels.
It’s unclear as to whether the demand is continuing without interest from foreign buyers, or if they’re continuing to buy despite the tax. In September, a survey from Chinese international property search website Juwai.com found that Chinese buy inquiries for Canadian properties had jumped 30 per cent year-over-year.
“Chinese investors still believe the Canadian market is a good one, and Chinese seeking a better life are still taking Canada as one of their preferred destinations,” Byron Burley, Juwai.com vice president told BuzzBuzzNews.
New data will mean that the question of foreign buyer impact could be answered once and for all. The release is expected to provide insight into the number of foreign-owned vacant properties, as well as where buyers are getting their down payments.