Foreign ownership has been the scapegoat for some of the imbalances in Canadian housing markets this year. But the fingers should be pointed elsewhere; foreign ownership is actually quite low, according to a housing insight report released by the Canadian Mortgage and Housing Corporation (CMHC).
Non-Canadian residents own a variety of types of housing, but the CMHC report focused on condominium apartments. Although data has shown that foreign ownership isn’t as prevalent as the public may have thought earlier this year, this CMHC report has offered some notable markers in various census metropolitan areas (CMAs).
The first is that foreign ownership of condominium apartments is the highest in Vancouver and Toronto at 2.2 and 2.3 per cent, respectively. This percentage is lower than it was in 2015, which brings it back to around 2014 levels. The elevated figures observed in 2015 were due to an unusually high proportion of foreign ownership in newly constructed condominiums that year, relative 2014 and 2016.
Foreign ownership held pretty steady in both Montreal, at 1.1 per cent, and Calgary, at 0.9 per cent. As for other markets in Canada where the overall condominium market is smaller, foreign ownership ranged from 1.2 per cent in Halifax to 0.2 per cent in Saskatoon and Regina.
“Foreign ownership is just one factor influencing Canada’s housing markets – but it’s an important one that continues to gain attention,” CMHC market analysts Andrew L. Scott and Francis Cortellino said in the report. “Our studies show that the share of foreign ownership remains low and concentrated in newer, larger buildings located in the cores of major cities like Vancouver, Toronto and Montreal.”
CMHC held roundtable discussions earlier this year and the result of those conversations combined with the most recent survey data showed that 4 to 8 per cent of the condominiums owned by foreigners in Montreal weren't occupied in 2015. Of the foreigners who bought a condominium in the Montreal CMA in 2015, 40 per cent did not get a mortgage -- this is compared to 15 per cent of all buyers (Canadian and foreign). Results also found that condominiums owned by foreigners in the central Montreal generally had higher values than those owned by Canadians.
The CMHC survey supports the suspicion that foreign ownership is concentrated in newer condominium projects, at least in Ontario and British Columbia. In Toronto, Vancouver, Victoria, and Kelowna, the percentage of foreign owners was higher in these newer buildings, although this fact did not hold true for other areas of the country.
In Toronto, the share of foreign ownership was 3.9 per cent in buildings completed since 2010, which the report indicates was almost double the share of the entire stock. In fact, out of the total number of foreign-owned units in Toronto, about half of them were in these newer buildings. Within the Toronto CMA, the share of foreign ownership became larger for structures in Toronto Centre (former City of Toronto). Toronto Centre had a rate of foreign ownership of 3.5 per cent, and for buildings completed since 2010 it was even higher at 5.2 per cent.
For Vancouver, the share of foreign ownership was 5.0 per cent in buildings completed since 2010, compared to 2.2 per cent of the overall stock. Inside the Vancouver CMA, Burrard Peninsula had an overall rate of foreign ownership of 5.0 per cent. The other major centres in British Columbia – Victoria and Kelowna – showed this trend as well, but to a lesser degree. In in Montreal, the foreign ownership share was 4.3 per cent in the Downtown and Nun’s Island zone.
Foreign owners also showed a preference for larger buildings. Again, this was most prominent in the largest centres. In Toronto, foreign owners represented 5.5 per cent of condominium apartments in buildings with more than 500 units. In Vancouver, for buildings with more than 100 units the share was 3.2 per cent. For large buildings located in the urban cores of these CMAs the shares increased; in Toronto Centre the share grew to 7.6 per cent and in Vancouver City the share grew to 4.4 per cent.
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