Foreigners own few homes here — but influence may be big

New statistics from Canada Mortgage and Housing Corp. and Statistics Canada show that foreign buyers owned 3.4 per cent of all residential properties in Toronto and 4.8 per cent of residential properties in Vancouver.

For condos, CMHC says foreign buyers owned less than one per cent of the condo stock in 17 metropolitan areas across the country.

The data also show foreignowned homes are more expensive than those owned by Canadian residents.

Graham Haines, research and policy manager at the Ryerson City Building Institute, said the foreign buyer data hint at larger issues about speculation in the real estate sector, making it the canary in the coal mine of a growing affordability problem.

“Investors in the real estate market are the same no matter where they’re from, whether they’re Canadian or foreign investors,” he said. “What we’ve seen since 2010 is there is a lot more investment and speculation happening in the real estate market no matter where those people are coming from.”

Which raises the question for policy-makers: What to do now?

Experts are split.

Doug Porter, chief economist at BMO Financial Group, said the low proportion of foreign buyers nationally doesn’t mean their influence in the housing market is just as small. Even a small percentage of new buyers in a market that is already stretched can have large ripple effects, he said. “These numbers, especially in Vancouver, might be a little bit lower than I might have guessed, (but) it’s still a very significant portion and to me this does show how foreign investors are a very big part in driving these markets.”

David Madani, senior Canada economist at Capital Economics, said the data suggest the influence of foreign buyers isn’t the primary driver of housing prices. More pressing is excessive mortgage credit from domestic banks and lessregulated non-bank lenders, as reflected in Canada’s high level of household debt, he said.

A spokeswoman for Finance Minister Bill Morneau said future data releases will drive any future policy decisions.

The data released was the first in a multi-year effort to create the most comprehensive database of homes and owners.