Ephraim Vecina
Mortgage Broker News
The latest numbers from the Canada Mortgage and Housing Corporation support its CEO’s recent assertion that foreign ownership plays only a minor role in the record-breaking price increases in the country’s three hottest real estate markets, but an analyst stated that massive gaps in data still need to be addressed if Canadian governments are to mount an effective strategy against the home affordability crisis.
“We have to realize that [foreign ownership] is a factor, but it’s not the main factor,” CIBC economist Benjamin Tal told CBC News. “I want to open up the hood here and get a better sense of what the motivation is.”
Tal noted that information on why exactly do overseas nationals buy Canadian homes is woefully scarce, and that domestic consumers would benefit immensely from knowing if foreigners are acquiring properties for investment purposes or just to park their funds.
The analyst added that governments need to focus on dealing with more identifiable contributors towards home price increases, such as the phenomenon of shadow flipping.
On Wednesday (November 30), the CMHC announced in its report that foreign money accounts for only 2.2 per cent of condo units in Vancouver and 2.3 per cent in Toronto as of October 2016.
“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.
“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 earlier this year, which found that foreign nationals held only 3.6 per cent and then 1.7 per cent of all sales in the province in September and October, respectively.
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