Foreign buyers are more interested in snatching up newer condos in Toronto and Vancouver than older ones, a report from the federal housing agency suggests.
The report says that while overall rates of foreign ownership in the Toronto and Vancouver condo markets are low — 3.3 per cent and 3.5 per cent, respectively — they spike when you look at newer buildings.
Canada Mortgage and Housing Corp. says less than two per cent of Toronto condos built before the year 2000 are foreign-owned.
But for condos in central Toronto built after 2010, foreign ownership spiked to 8.7 per cent in 2015, up from 6.6 per cent the previous year.
CMHC says a similar effect can be seen in Vancouver, where foreign ownership of condos built before 1990 is less than two per cent.
For Vancouver condos built after 2010, foreign ownership rises to around six per cent. Overall, foreign ownership of Vancouver condos rose from 2.3 per cent in 2014 to 3.5 per cent in 2015.
“Despite a range of statistics suggested by various studies on the size of foreign ownership, available factual information remains scarce,” the release cautioned.
Housing prices have risen beyond the reach of many in Toronto, but affordability has reached a crisis point in Vancouver. In January, a global survey found that Vancouver had the third-least affordable housing market in the world, behind only Hong Kong and Sydney, Australia. Vancouver was less affordable than London and San Francisco, cities that debate their own affordability crises.
Vancouver’s white-hot market is often attributed to speculative buying from foreign buyers, particularly from China.
However, it’s hard to attach firm numbers to the idea. Late last year, urban planner Andy Yan released a study which claimed that two-thirds of the homes sold in certain upper-income Vancouver neighbourhoods were being bought by investors in mainland China. Many buyers were students or full-time homemakers, which raised questions about who was really behind the transactions.
Yan’s research, which was based on studying surnames, has been criticized, but so far nobody else has come up with very clear data. (The CMHC study only covers condos, and only for recent years.)
Fri, Mar 18: It is arguably the most controversial issue in Metro Vancouver right now — housing affordability. Today Premier Christy Clark unveiled her government’s plan on cracking down on the shady practice known as shadow flipping on the market. Global’s Grace Ke reports.