One of the hottest topics in real estate circles in Canada these days is the proportion of offshore buyers, and if and how they are inflating prices in local markets. This month, the Canada Mortgage and Housing Corporation has released a report which investigates the extent of foreign ownership in the condominium markets of Canada’s major cities. One of the interesting stats to come out of the report is that foreign ownership of condos tends to be higher in newer buildings – those built since 2010 in the cities of Toronto and Vancouver.
CMHC reports that the rate of foreign ownership in the overall Greater Toronto Area (CMA) is less than 2% for condominium projects completed before 1990, but foreign ownership rises to 7% for condos completed since 2010.
For Toronto, foreign ownership of condos is highest in the downtown core of the city, where the numbers approach 10%. CMHC does note that the methodology used for their study allows for some leeway in the exactness of the numbers.
The foreign ownership totals are higher in Toronto, somewhat surprisingly, than they are in the Vancouver area, where foreign investors count for less than 2% of the projects built before 1990, a number which increases to about 6% for those completed since 2010.
Also interesting to note, there are some fairly large statistical jumps from 2014 to 2015 – for example, in the overall Toronto CMA, foreign ownership of condos in that single year jumped nearly a full 2 percentage points – from 5.5% to 7.4% – for buildings completed 2010 or later. It’s important to remember, however, that some of these numbers can be skewed by condo construction completions, and when there are a large number of completions in a single year, the foreign ownership numbers will grow correspondingly. The growth in foreign ownership of condos, nevertheless, as shown by these CMHC statistics, is obviously real , and hard to ignore.
So what are we to make of foreign ownership of condos, and how does it affect our local market in the Greater Toronto Area? I think that the numbers are still relatively low, although certainly 10% foreign ownership of newer condos in the downtown core of Toronto will have a effect on the market. Toronto’s growing role as a global city brings added pressures on real estate market pricing, it’s a simple matter of supply and demand. That new offshore investors are most interested in newer projects indicates that attention is being paid to many of the latest condo project launches, many of which are being marketed globally. It appears that the word is getting out there that Toronto, and its environs, are a good, stable, and safe place to invest. Going forward, I believe this trend will continue.