Metro, December 16, 2014 - For the first time, the Canada Mortgage and Housing Corporation has put a number on the percentage of condos across the country owned by foreign investors and says it’s highest in Toronto — at a mere 2.4 per cent.
Vancouver is close behind, with 2.3 per cent of its condominiums owned by people who reside outside of Canada, according to a report released Tuesday.
It is the first time CMHC has come up with any firm sense of how big the foreign ownership component is, and did so based on asking condo owners as part of its annual rental market survey.
The numbers are sure to come into question from housing watchers who believe the actual percentages are at least twice that — at least 5 per cent — based solely on anecdotal evidence.
The percentage of foreign ownership has become a key question in the industry, as there are fears if the market turns, foreign owners will be more likely to put their units up for sale and flood the market, hoping to get their money out as quickly as possible.
According to the CMHC survey of owners who rent their units out, Toronto and Vancouver top the list, and most of the units are in or close to the downtown cores.
Foreign ownership is considerably less in the other nine Canadian cities where condo owners were surveyed: Victoria is 1.1 per cent, Calgary is 0.2 per cent, Edmonton is 0.1 per cent, Saskatoon is 0.3 per cent, Regina is 0.1 per cent and Winnipeg is 0.1 per cent, Ottawa is 0.7 per cent, Montreal is 1.5 per cent and Quebec city is 0.6 per cent.
CMHC has had a notoriously hard time trying to get a firm sense of just who owns Canada’s condos, which even this report acknowledges have become one of the primary sources of rentals for people in the face of almost no construction of purpose-built apartment buildings over the last few decades.
And they are becoming more critical than ever as a housing source, it says.
“Rising house prices and sluggish wage growth have helped to keep more households in rental accommodation this year,” said Dana Senagama, CMHC’s senior market analyst for the GTA.
“Lack of new supply in the purpose-built rental market has created strong spill-over demand into the rental condominium market. Increasingly, rental condominium apartments are becoming the popular housing choice among young adults who are choosing to live in core urban centres with closer access to work and transit.”
It’s for that reason that the foreign-owned component has become a key question.
The rental report, which covers the period up to the end of October, found that the average vacancy rate for purpose-built rentals across the GTA has remained unchanged at 1.6 per cent. Rent for the average two-bedroom apartment rose 2.7 per cent in the GTA during that period.