Anecdotal evidence suggests Chinese investors are particularly interested in buying Canadian property for their children as they attend school in cities such as Toronto and Vancouver, two of the most multicultural places in the world. However, neither the government nor the CMHC keeps documentation on foreign-made purchases, leaving the true influence of foreign activity in the Canadian housing market very opaque.
Lawrence Kobescak is an Ontario mortgage agent who says records of foreign purchases can help analysts understand where the housing market is strong, what external factors might destabilize growth, and what economic policies are necessary to counter any weaknesses.
“Without a clear picture of foreign ownership in the residential market in Canada, we cannot predict the impact shifting foreign investor sentiment may have on the Canadian housing market.”
Unlike Canada, the US does keep track of home purchases made by foreigners, and the US National Association of Realtors revealed Canadians have become the largest foreign nationality investing in US homes. As Canadians choose to buy winter holiday property in the southern US, there is less domestic investment in Canadian homes. As a result, the Canadian economy is more dependent than ever on foreign investments to maintain growth. The lack of information on what factors are fueling those investments threatens the future of Canada’s housing market at a time when the market is already cooling off.
Economists agree that foreign-made home purchases are unlikely to stop, but they believe Canada should at least track these investments, if for no other reason than to better understand the dynamics at play in the national housing market.