Foreign buyers are more interested in snatching up newer condos in Toronto and Vancouver than older units, according to a new report from the federal housing agency.
The report from Canada Mortgage and Housing Corp. (CMHC) 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 it comes to newer buildings.
CMHC says less than two per cent of Toronto condos built before the year 2000 are foreign-owned.
But for Toronto condos built after 2010, foreign ownership climbs to higher than seven per cent.
Newer buildings in certain parts of the city are even more desirable to foreign buyers, says CMHC.
The agency says roughly 10 per cent of newer condo units in an area the agency calls “Toronto Centre,” which roughly corresponds with the former city of Toronto prior to amalgamation with its outlying suburbs, are foreign-owned.
CMHC says a similar phenomenon 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.
“This report represents another piece in the puzzle of foreign investment in Canada,” CMHC’s chief economist Bob Dugan said in a statement.
“It remains a top priority for CMHC to continue to get more information on foreign investment in Canada’s housing market.”
Foreign ownership of Canadian real estate has been the subject of wide speculation recently, although scant data exists.
Some critics have expressed concerns that wealthy foreign buyers are driving up property costs in Vancouver and pricing local buyers out of the market.
There are also fears that foreign buyers who don’t live in their Canadian homes could be quick to turn around and sell those properties, which could exacerbate any market downturns.
However, there’s no conclusive data showing the extent of foreign ownership in Canadian real estate, or what effect foreign buyers may be having on prices.
CMHC’s survey only looks at the condo market. The agency surveyed property managers about how many of the condo units in their buildings are owned by people whose permanent residence is outside of Canada.
The federal government has earmarked $500,000 over the next year for Statistics Canada to develop a method for measuring the level of foreign investment in Canadian real estate.