Ephraim Vecina
Mortgage Broker News
Citing recently collected data, the Canada Mortgage and Housing Corporation announced on Wednesday (November 30) that foreigners represented only a miniscule segment of home owners in the country’s most active markets, and thus could not be considered as the main driver of the outsized price growth in the Canadian real estate sector.
The latest CMHC report noted that foreign nationals possess a mere 2.2 per cent of condo units in Vancouver and 2.3 per cent in Toronto.
“The evidence tells us that the origin of investor activity in Canadian real estate is primarily domestic,” CMHC president and CEO Evan Siddall said in a speech, as quoted by Metro Vancouver.
“When a white person buys a house, we don’t know. When a person of a different colour does, we do, and that’s not good economics.”
The numbers and comments backed up similar observations made by the B.C. government, which found that foreign money accounted for only 3.6 per cent and then 1.7 per cent of all sales in the province in September and October, respectively.
Despite speculations that the 15 per cent property transfer tax on foreign buyers caused the decline, however, Siddall emphasized that the market already demonstrated signs of slowdown prior to the implementation of the levy.
The CMHC head added that it was a potent blend of record-low interest rates, the rise of the investment housing trend, a growing population, and a healthier economy that is the ultimate driving factor in the price increases, and that the only reliable way to address the affordability issue is to improve supply via the removal of red tape to improve construction speed.
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