FINANCIAL POST
FOREIGNERS OWN FEW HOMES IN TORONTO, VANCOUVER.
• 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 foreign- owned 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 i n 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,” Haines 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 Capi tal 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.
“We have always stressed the need for reliable data in order to make evidencebased decisions when it comes to protecting what is, for many Canadians, the most important investment they will make,” Chloe Luciani- Girouard said.
The data released was the first in a multi-year effort to create the most comprehensive database of homes and owners. The plan is to have data on some 5,000 municipalities by the end of 2022, with more data on sales and country of origin among other variables.
The next set of information is set to be released next spring.
Tuesday was the first view of the stock of housing in the census metropolitan areas of Toronto and Vancouver, which combined included 45 municipalities, and 15 additional metropolitan areas surveyed by CMHC.
Meanwhile, Torontobased Mattamy Homes Ltd., North- America’s largest private residential homebuilder, is boosting investments in the U. S. as regulatory excess sends land prices — and frustration — skyrocketing in Ontario, chief executive officer Peter Gilgan said.
Mattamy expects to generate more than half its business from the U.S. in the next five years, including Arizona, California and Florida, up from about one- third now, Gilgan said. The company posted annual revenue of $3.2 billion for its fiscal year ended in May.
A push to curb urban sprawl has pinched supply and helped send Torontoarea land prices soaring, developers say. The cost has almost tripled in some areas over the past five years, according to real- estate advisory Altus Group Ltd.
Development consultants Malone Given Parsons Ltd. says zoning restrictions limit space for residential construction to only 17,200 hectares, much less than the 100,000 hectares the province says is available.
“It’s complete fabrication as to how much land is available,” Gilgan, 67, said. “If you can find all that land that you say is available at an affordable price, bring it to me today and I’ll get my chequebook out. Nobody’s brought me an acre.”