Remember back in 2014, when the CMHC released data on foreign ownership of Toronto condominiums?
And remember how few people believed the numbers?
I thought the statistics that CMHC provided were laughable at best, and that perhaps they were using outdated information, or not missing new-construction numbers altogether.
Well, I’d love to see them, or somebody competent, re-run those numbers in a couple years, because foreign buyers are snapping up condos like never before…
Sometimes, you can just “feel” a story in the air.
This topic has been on my “Blog Idea” list, which is actually a Post-It note stuck to the inside of my old-fashioned paper day-planner, for about the last month.
And then this week, two articles came out on the subject, and I thought perhaps it was karma.
But before we get into the new news, let’s take a look at the old news.
Back in December of 2014, CMHC released data on foreign ownership of condominiums across major cities in Canada, which included the following:
Toronto – 2.4%
Vancouver – 2.3%
Montreal – 1.5%
Victoria – 1.1%
Ottawa – 0.7%
The data also included data on foreign ownership of downtown condominiums, as follows:
Montreal – 6.9%
Vancouver – 5.8%
Toronto 4.3%
After the data came out, so too did the critics.
HERE was an article by Gary Marr from the Financial Post, titled, “CMHC Finally Releases Foreign Ownership Data On Housing – Too Bad Few Believe It.”
HERE was a blog post I wrote on the subject that week as well.
I said it before, and I’ll say it again – I think those numbers are really, really low.
And we’re not talking 5%, 10%, or 15% low. I mean the actual numbers could be DOUBLE.
I guess we would have to define “ownership,” but that’s a tall order.
If a property is owned in the name of a resident of Toronto, but the money used to buy the property was wired from overseas, then who really “owns” the condo?
That is why I think the numbers are so skewed.
Well, that, and I just think the CMHC didn’t have accurate data, and/or it wasn’t up to date.
Case in point, read the article in Wednesday’s Globe & Mail, and you might see why any numbers on this subject must be absolutely, positively, up to date.
“Toronto Condo Buyers Head Directly To China To Court Buyers” is the title of the article, in an awesome piece of journalism by Tamsin McMahon & Nathan Vanderklippe.
The article explains that brokers looking to sell to overseas buyers used to simply rely on contacts based in foreign countries, but today, they’re actually heading over and doing presentations in person.
Wasn’t it just a matter of time?
If domestic buyers ever stopped buying pre-construction condos, surely developers would have to do something different and think outside the box.
But part of me thinks that developers might even prefer to deal with overseas investors, since they’ll likely put up less of a fuss before, during, and after construction than a Toronto resident with a foot on the ground probably would.
It also goes without saying that for some people overseas, Canadian real estate is cheap by comparison.
The best line in the article, which was something real estate agent Tony Ma told a room full of would-be investors:
“Canadian houses are so cheap; why not invest?”
Is that how they see it?
Canadian houses are cheap?
All we ever hear about is how expensive Toronto real estate prices have become, and how there’s a massive bubble about to pop.
And yet investors across the world believe that Toronto real estate is “cheap?”
My two cents, for what it’s worth, is that while the price of Canadian real estate has appreciated rapidly over the last two decades, it’s still cheap relative to other world class cities. Our real estate might cost 1/4 of what a comparable property would cost in London, England, and that’s even after our 20-year bull cycle.
So while Torontonians see our prices as “expensive,” people around the world, do not.
We Torontonians also haven’t seen our city grow, on the world stage, from the eyes of a foreigner. Maybe we’ve taken it for granted, and this quaint little city in Canada has become a major destination for others around the world.
The Globe & Mail article gave several examples of wealthy, overseas residents who wanted to send their children to Canada for school, or who had already done so, or who wanted to move here full time.
And I think it goes without saying – these people aren’t looking to rent.
So where is foreign-ownership headed?
What would those CMHC numbers look like today? What would they look like in two years?
Well, I’d be remiss if I didn’t share another newspaper article from Wednesday, also in the Globe & Mail:
“Canadian Banks Helping Clients Bend Rules To Move Money Out Of China”
Wow, that’s an attention-grabbing headline, isn’t it?
Here’s the juicy part:
–
Some Canadian banks allow wealthy Asian investors to skirt Chinese law by helping them bring in large amounts of money that is often used to buy real estate in Vancouver.
Financial institutions in the area have flagged more than 8,200 suspicious transactions since January, 2012, the year China began cracking down on citizens they suspect of corruption.
Ninety-six per cent of those transactions were also facilitated by the banks, however, even though the vast majority of that business involved suspected money laundering, according to FinTRAC, the federal agency responsible for tracking money laundering.
It is illegal for Chinese citizens to remove more than $50,000 (U.S.) a year from China without government permission, partly to stop corrupt millionaires from fleeing with their money. But a review of B.C. court cases by The Globe found they have worked around this restriction by sending millions of dollars into Vancouver-area banks through multiple wire transactions of smaller amounts by family and friends.
–
I find the last paragraph interesting, since it’s that very law that makes Chinese citizens want to remove money in the first place.
I’ve heard on numerous occasions, including from my own clients, that the political instability (or potential instability) concerns many wealthy Chinese citizens to the point where they worry about the safety of their money in Chinese banks. So many of them would rather own Canadian real estate, whether it goes up/down/sideways in value, than keep money in the bank, with risk, and where the rate of inflation is higher than the rate of interest.
As a result, a lot of Chinese money is effectively being “banked” here in Canada in the form of condominium investment.
I won’t speak to the idea of banks “helping clients bend the rules” since I don’t know enough to provide an accurate opinion.
But I find the timing of that article, which was written by an investigative journalist and likely took a lot of time to compile, rather interesting given the article about real estate developers going directly to China to sell condos.
In the end, all of this leads me to question that “2.4%” statistic that CMHC gave us about foreign ownership of Toronto condos.
I often evaluate a property with a comparative market analysis, but I also often use the good, ole’ “gut feeling.” I think my gut feeling is accurate most of the time.
Suffice it to say, my gut feeling when that 2.4% statistic came out was that it was low, and the two articles from Wednesday’s paper give me even more reason to believe so.
Now maybe a fifty-dollar follow-up question is this: why do we care if condos are foreign-owned?
A reader asked that in my December, 2014 blog post, and added:
“The supposition that foreign owners would flood the market with listings in a market downturn is patently unproveable, and appears by all accounts to be yet another invention by the bears to “prove” that they’ve been right all along…about something.”
So other than the potential for foreign-owners to “bail” on the market, is there any other reason why we care about the percentage of foreign-owned units?
Joe Q.
at 9:20 am
I recall that the methodology for the CMHC’s foreign-ownership numbers seemed fishy to me, in the same way that their methodology for rental vacancy numbers seems fishy. Strange assumptions, limited data sets, and a very constrained way of collecting data.
Kyle
at 9:30 am
“why do we care if condos are foreign-owned?”
Bingo!!! Most rational folks will recognize this as just another bit of histrionics manufactured by real estate bears.
It’s really fascinating to watch. As has been proven time and again, the whole bear case is based on emotion, not logic or facts. Even a dummy like me can shred any of the bear arguments into a pile of garbage. It’s proven time and again that their assumptions are flawed, their historic data is mined, their conclusions are illogical, but yet people still persist in believing in it. Which leads me to conclude that these people are responding emotionally not rationally. You can even see the depth of emotions in the bears manifest into a Stockholm syndrome like behaviour – where delusional people defend their deluders. I remember one time a reader threatened David that he would stop reading this blog for agreeing with my criticism of Garth Turner. After many years of observing this behaviour i think i can summarize the bear case into three basic emotional buckets:
Hope – This is where i have to give Garth Turner serious props. He can take any bit of news and somehow turn it into some faint hope that RE prices will fall. Every time there’s a news release, it is like watching Wile E Coyote receive a new box from ACME. After 7 years, he is still able to come up with creative logic defying spin that manages to get his followers whipped up into a frenzy. That takes creativity!
Fear – This is where Madani and Macbeth find their comfort zone. Buy now and your house will be worth 30% less next year…., Buy now and your house will be worth 30% less next year…., Buy now and your house will be worth 30% less next year…., Buy now and your house will be worth 30% less next year…., Buy now and your house will be worth 30% less next year…., Buy now and your house will be worth 30% less next year…., Buy now and your house will be worth 30% less next year….
Frustration and Hate – Rabidoux lacks the creative talent of Garth Turner, and he’s beaten the skin right off of the old price-to-income and price-to-rent arguments, so instead he now likes to manufacture bogeymen that RE bears will quickly adopt as “what is screwing me over from buying a house lately”. He does have a knack of carefully choosing subjects where there isn’t enough data to definitively prove he is full of it, and ironically then trumpets the lack of data to amp up the feelings of frustration in his followers. Some classic examples are how he makes a hullaballoo over sub prime lending, which by all accounts make up a tiny miniscule fraction of mortgages in Canada. Or he’ll go on and on about CMHC is screwing us, and of course last but not least the topic at hand, how foreign buyers are somehow a menace to RE prices.
David Fleming
at 12:04 pm
@ Kyle
It was you and “Appraiser” that suggested we shouldn’t care about foreign ownership when I blogged back in December of last year.
Good to see you guys are backing it up a year later!
BTW – I love the “ACME” reference. I was the kid that was pulling for Wile E. Coyote to eventually prevail, but then again, I also wanted to see Sylvester eat Tweety. Every time he got that bird in his mouth, he forgot to chew! The old lady would hit him with a broom, he would spit Tweety out, and Tweety would be so relaxed and calm that it would just piss me off even more!
RenruT
at 3:26 pm
LOL
Kyle, I think it’s time you took a deep breath and went for a walk outside. I can’t think if I’ve ever seen a blog comment that length in my life. (One that almost solely consists of repetitive long winded ad-hominem attacks I should add). How long did you spend writing that thing anyways?
Kyle
at 3:40 pm
It was meant to be tongue in cheek, but also happens to be entirely true. Took me about 5 minutes, i’m a real fast typer.
Noel
at 10:11 am
The reason people care is very basic. It’s because they feel that foreign demand is what is pushing prices up beyond that which they would be but for that demand. They’re upset that that demand is resulting in them having to pay higher prices. The concern is that if the demand from foreign buyers wanes then prices will fall. Otherwise, no one would give a hoot.
It’s moot anyway because you can’t do anything about it.
David Fleming
at 12:02 pm
@ Noel
Can’t do anything about it?
Right-wingers might suggest that ‘government’ enact legislation to make it very difficult, or prohibitively expensive, for foreigners to buy real estate.
It happened in Australia…
Fro Jo
at 12:24 pm
That doesn’t sound very right wing.
Hey, where is that Grolsch guy? I miss his/her comments.
David Fleming
at 2:21 pm
@ Fro Jo
You mean Chroscklh, I believe.
He or she is everybody’s favourite blog commenter. I go to family dinners and my sister-in-law won’t stop talking about him.
Noel
at 10:11 pm
We cannot do anything about it. The government could if they wanted to but, um, they won’t.
Potato
at 10:30 am
The short answer is that we don’t know how much influence foreign buyers have on the market, or what the implications of that are. Above, Kyle goes on a hilarious rant saying that talk of foreign buyers is a bear thing, when in my experience it’s mostly bulls who talk about the size and the effects of foreign investors.
On the one hand, foreign investors are used to justify high prices — as long as Toronto is cheaper than New York, London, Paris, or whatever comparison “world city” you care to name (except Chicago, never Chicago), then prices can only go higher! And if foreign money is sloshing in, then all the concerns about fundamentals somehow don’t matter because it’s not local incomes that are buying real estate. I’ve seen people simultaneously believe that foreign investors buying must justify high prices because they’re rich and therefore must know more than we do, while at the same time saying that if price-to-rent doesn’t make sense, then it’s because foreign buyers are operating out of fear and just trying to park money offshore and not actually make a return — they just rent out units to cover the ongoing costs of their call option.
On the other hand, some bears will point out that foreign money being uncoupled from local factors plays the other way too: hot money can just as easily flood out; non-owner-occupied units are more apt to be dumped faster at steeper losses if a crisis elsewhere causes a margin call; or that demand can vanish if there is no longer a pressing fear about getting capital out. And even if you don’t want to go there, if a foreign buyer is willing to pay top dollar to subsidize a local tenant, then any way you slice it it’s still the deal to take.
And of course exactly the same narratives played out in 1989: people claimed prices in TO were driven higher by money fleeing Hong Kong in advance of the British lease expiring. And there were enough cases to show that it was happening to some extent, to make the anecdote real in people’s minds, but when the tide went out we saw that there was no shortage of local speculators, either.
Anyway, I don’t know how big the influence is. The CMHC methods were flawed, but there isn’t much else to suggest that the effect is much bigger than a few percent anyway, other than anecdote and feelings. Certainly the increase in mortgage debt suggests that there is plenty of local leverage behind price increases. And though a few percent may sound like a small number, it still represents thousands of units each year because of how much activity is happening here — which supports the narrative of salespeople going overseas to court that money.
Kyle
at 9:57 am
Let me explain why i think it is a bear argument. There is no doubt that an increase in foreign buyers will lead to an increased demand resulting in an increase in prices. This isn’t a bull argument it is simply supply and demand. I don’t think any bear would contest this.
What is highly contestable however, is this notion (seemingly held exclusively by bears) that an increase in foreign buyers puts the market at higher risk for a “correction” (i hate this term – because i have yet to see a single person actually prove the current valuations are “incorrect”). Here i agree with you, we don’t know what the implications are, but i see a lot of bear hopes riding on foreigners flooding out and selling their units at pennies on the dollar. Given that foreign buyers tend to be better funded, use lower leverage and have longer holding periods than the average local buyer, i think the bears will be in for yet another round of disappointment, Even the language bears use reveals how emotionally vested they are, their constant baseless use of “hot” money or HAM shows the depth of hope they have riding on this notion and the feelings of being screwed over by foreigners (when in fact it is their own unrealistic expectations that they should be blaming). I don’t think i’ve ever heard a bull say the government needs to restrict foreign buyers, collect data on foreigners or tax them to death. These are bears arguments and they are grounded in emotion and entitlement not logic.
“And if foreign money is sloshing in, then all the concerns about fundamentals somehow don’t matter”
Also wanted to point out that if foreign money comes sloshing in, then those foreign individuals by definition are a fundamental factor, if your measuring stick or what you call “fundamentals” doesn’t include their profiles, then it’s not that fundamentals don’t matter it’s actually that your version of “fundamentals” are just plain wrong.
Jimbo
at 11:43 am
The only issue I see and I will admit I’ve only read a couple articles on the issue deal with China and Vancouver. If in fact they’re only allowed to move $50,000 out a year how are they buying all of these million dollar plus properties.
If our government is serious about joining the pacific rim trade pact and they’re forced to cooperate with the Chinese government to track down this money laundering scheme. What happens to all of that equity and if China holds the houses do they sell them all at once and possibly flood the market or do they actually care about getting as much money back as possible and sell slowly. We don’t even know how much influence Chinese buyers have in Toronto.
I admit I really don’t know how plausible this situation really is (maybe over 20%) but the sad part is we as Canadians don’t have any idea how exposed we are.
Also it is important to keep in mind that the average foriegn investor has lost 30% of their properties original value minus the increased amount. This obviously fluctuates on the individual currency. Just because we lost 30% of our value when compared to the US doesn’t mean it is universal. Maybe two examples Chinese investor buys $500,000 CAD property in Toronto in 2010 at 3.3 million Yuan. Sells in 2015 at $700,000CAD and gets back 3.4-3.5 million yen. A 40% increase in value nets them $20-30k in CAD profit. Same numbers but using UAE currency 1.8 million AED to buy and gets back 2 million AED or 40-60k in CAD profit.
Maybe now is the time for them to buy cheap and in 3-5 years when our dollar is higher they can cash out, but right now I would like to think they are watching our dollar very closely.
Appraiser
at 11:18 am
Are we all sure that we’re dealing with the same definition of foreigner. Because my spidy-senses tell me that most of the chatter on this subject isn’t referring to Americans who are snapping up vacation homes in Atlantic Canada; where sellers are all too happy to have someone – anyone buy their property due to weak demand.
And I don’t recall Canadians (or Americans) complaining about other Canadians being able to purchase properties in Arizona or Florida.
Is this not just another case of irrational fear of the “yellow peril.”
David Fleming
at 12:05 pm
@ Appraiser
Thank you for bringing up the elephant in the room.
I’d hate to admit it, but you’re right. There’s a serious double-standard.
Marie
at 7:42 pm
If you’ve never heard complaints about Canadians buying homes in Arizona or Florida, it’s probably because you don’t live in Arizona or Florida. I’ve lived in the U.S. where there are many Canadian “snowbirds” — trust me, there are complaints.
Jimbo
at 12:57 pm
We have property in Florida and Canadians are not really well liked down there because in the past we have driven up the cost of housing. Most Americans retire there because they don’t have state income tax and they also don’t have an inheritance tax.
Clifford
at 11:21 am
I’ll say this. If I owned a house in say Riverdale or Leslieville…I’d stay there for as long as I could…even if I wanted to move…I’d just stay there, use the built up equity to do some renovations instead of moving.
Why? The cost to move is exorbitant. The double land transfer tax is a huge deterrent among other things. What is the incentive to move?
People are not selling. That’s the problem.
Appraiser
at 9:08 am
@ Clifford. How do you explain the fact that TREB is heading for an all-time record number of transactions this year? Translation: there will be more sales than ever before. How is it then that “people are not selling” ? Sorry, not logical.
Remember, don’t confuse inventory with supply. Example: 10,000 listings come on the market one month and all of them sell, inventory equals zero. If on the other hand only 5,000 listings sell, then inventory is 5,000. However, supply was exactly the same.
It’s all about demand.
Geoff
at 1:07 pm
@ Clifford – bingo. I feel trapped in our house, but for us to move (and make the new neighbourhood worth it) we’re looking at $1.5M for a fixer-upper.
I will say though that I’m SO tired of the ‘Toronto is 1/4 the price of London’ pitch though.
It #$@#$#@ing should be, at least. Toronto is 1/10th the CITY of London in terms of experience, culture, history, public transportation, things to do, shopping, restaurants, theatre, schools… the list basically never ends.
Kyle
at 2:11 pm
I disagree, when it comes to livability Toronto consistently ranks right up there amongst the World’s top cities. No doubt London has far better arts, history, architecture and culture. Great if you’re a tourist, but when it comes to livability – Eat, sleep, work and play is what matters. I don’t think eating in London is a 10x better experience, nor is sleeping or working. Art and culture 10x better than Toronto? Maybe…if you’re really into that stuff, i actually don’t know too many people who regularly go to galleries, Operas or Theater enough that they would pay 4x the price to live there. Not to mention Toronto actually offers many things that most World Class cities don’t. I think most Torontonians just take it for granted. You can literally play golf, fish, canoe, play tennis, hike in the woods, swim in a pool, or on a beach right in the middle of the city for free or for next to nothing. Within a very short drive you can ski, water ski, sky-dive, go camping, you name it. Most people who grow up in Toronto have experienced many or all of these things, most people who grow up in other World Class cities have experienced few or none of these things.
Geoff
at 2:44 pm
Kyle – If eat, sleep, work and play is what matters – then London wins on its public transportation network alone. I’d say at least 3 of the times I’ve been to London, an entire tube line has been down for maintenance – and it had little to no impact on my travel time. Compare that to if the yonge line is closed down, it’s utterly #$#@$#ed.
It’s aA little bit unfair to say London lacks because it doesn’t have woods or a beach or a river you can easily kayak on (I’ve never tried the Thames). I still love my city Toronto and think it has a lot going for it, but to say that our prices are 1/4 the price of other world class cities implies equality, where by any real measure there isn’t in my opinion (and to be honest, when you hear lists of world class cities that aren’t put out by Toronto realtors, no one talks about Toronto).
Kyle
at 3:27 pm
You’ve mentioned public transit (which i 100% agree with you on), but other than that i’m curious what other “real measures” do you feel Toronto is lacking? Obviously livability will be different for different people, but the Mercer Quality of Living Survey (most widely recognized globally and not at all affiliated with realtors of any sort) ranked the cities as follows in 2015:
Vancouver 5
Toronto 15
Paris 27
London 40
New York 44
“In January, the Economist named Toronto as the best city to live in globally based on its top 25 list ranking “index of indexes,” http://www.cbc.ca/news/canada/toronto/most-livable-cities-include-vancouver-toronto-calgary-in-top-5-1.3194833
I think David worded it very well above, “We Torontonians also haven’t seen our city grow, on the world stage, from the eyes of a foreigner. Maybe we’ve taken it for granted, and this quaint little city in Canada has become a major destination for others around the world.”
Other than architecture, history and yes you’re absolutely right – public transit, IMO Toronto actually is on par with or not far off from most World Class cities, even when it comes to arts and culture. Our Festivals (TIFF, Fashion Week, Pride, Caribana) are pretty much first or second largest of their kinds in the world. When it comes to work, we have pretty much the same sectors that are available in NYC or London. When it comes to living, most people in Toronto don’t have to make do with under 500 sq ft. Basically we have what every other large city has and more, so i challenge this out-dated idea that we are not equal or even close.
jeff316
at 4:32 pm
It is about trade-offs. I think we definitely lack the amenities and events and excitement compared to truly world class cities, but I think you have identified some of the trade-offs we gain in return.
And I don’t think it is unfair to say that London lacks woods or lakes or whathaveyou. One, that’s part of the appeal of any place (e.g. would we say it is unfair to list living in Manitoba as one of Winnipeg’s downsides?) and two, I think if Toronto were to have 10 million residents, opportunities to kayak and hike and all that jazz would be more scarce and harder to partake of in a convenient manner.
Maybe I’m just of low standards, but I find Toronto to be very livable. Certainly not as livable as Hamilton or Kingston or Ottawa or Montreal, but by and large it’s a great place to live and raise a family. There is a lot to do, a lot to see, and it’s really not that hard to get around by car or by transit. There is great access to other parts of Ontario and the US. I’m not really much of an urban guy – we ended up here by accident – but after 11 years I feel more and more fortunate. I’d never have a two storey detached with a backyard and two parking spots five minute’s walk from a subway in any of those world class cities ever.
Joe Q.
at 4:16 pm
Toronto is a fantastic city, but comparing two cities’ housing prices and proclaiming one a bargain — without providing any other context — is meaningless. Perhaps unless you’re only concerned with housing as an investment play.
crazyegg
at 3:00 pm
Hi All,
As a real estate investor, I would sleep much better at night if the majority of property in Canada were held by Chinese nationals than by “spendaholic” Canadians.
Regards,
ed…
steve
at 4:53 pm
“Bingo!!! Most rational folks will recognize this as just another bit of histrionics manufactured by real estate bears.”
OK, then go ahead and take out a 500k mortgage and see what happens over the next 5 years.
Kyle
at 5:03 pm
I already own multiple properties and as i find more that meet my criteria, don’t worry i intend to do just that.
crazyegg
at 9:34 am
Hi K,
The newer laws that are in place now make it very challenging now to add another property to ones portfolio.
It’s like the federal government is ENCOURGING foreign investment by purposely shutting out Canadians, who are trying to do the right thing: by buying an income property in Canada, paying taxes on that property and consequently providing rentable housing.
It’s easier for a kid working at McDonalds to get approved a first mortgage than a high net worth Canadian investor to add to his portfolio.
I love Canada but we always shoot ourselves in the foot…
Regards,
ed..
Kyle
at 10:10 am
True, getting my first ever mortgage back in 2003 was like falling off a log. When they did the appraisal the Appraiser didn’t even have to get in his car. When i go to the bank these days, i feel like i need a forklift to carry all my documents.
condodweller
at 5:30 pm
The laws are designed to protect the economy and the average homeowner to protect from taking on too much debt. As an investor I agree it’s become more difficult but I take that as yet another warning sing. When the banks are worried that they may not get their money back from us, perhaps we should think twice before taking on another obligation. Of course it’s not to say they are right, but they are also managing their risk, which is also our risk, therefore I think it would be prudent to take it into consideration.
I remember when I took out a mortgage and my lender said he had a case on his desk with a guy who had 17 investment properties wanting to buy his 18th. He had to get special permission from his risk management department to give him the mortgage, which they did. Keep in mind this was about 10 years ago.
Squidward
at 6:51 pm
One of the issues related to foreign ownership that I’ve read about recently is the impact of empty investor properties on neighbourhoods–specifically in London and Vancouver, but not Toronto.
Squidward
at 6:54 pm
….like this one:
http://www.theglobeandmail.com/report-on-business/economy/housing/empty-homes-foreign-buyers-fuel-resentment-in-london/article24030223/?service=mobile
condodweller
at 5:15 pm
Wow a lot or comments in a day! I agree with Noel, he hit the nail right on the head. Canadians should care when they can’t afford to buy a house because prices have been pushed to unattainable levels by foreign buyers. Has this in fact happened? Who knows. The trouble is with the definition of “foreign buyer”. I suspect CMHC only considers foreign buyers those who are non-Canadian citizens and live in a different country. I have a feeling that there is a grey area of landed immigrants who bring their wealth with them who may well be pushing prices up. Trouble is they are not considered foreign buyers.
What I have yet to see evidence of in Toronto, is the empty condos sitting idle. I know some refer to lights being off on some buildings but I have no idea how reliable that evaluation is. I mean you’d have to take a picture of a building on a regular basis and eliminate units with lights on and do this for many buildings to get a realistic idea. All I can say is that I lived in a highly sought after building downtown at one point and I always knew the other units on my floor were occupied. Where I live now I know for a fact that most units on my floor are occupied. I know I’m a small sample but I’m sure I would have heard at least anecdotal evidence if it was a widely spread issue. I’m sure there is a good amount of foreign money bought condos in Toronto, and I use that term for both non-Canadians, and landed immigrants, however I see no sign of empty condos sitting around.
As far as the other argument goes on how prices will be affected if/when the tide goes out and all these people sell at the same time, I just take that the same way as any other risk factor for price decreases i.e. interest rates, job losses etc. It’s totally out of my control, which means I have to do my own risk assessment and if I’m uncomfortable with my exposure I reduce my exposure. It’s like the stock market, once the crash occurs it’s too late to do anything. I have to take action, right or wrong, before the crash happens. If I don’t take action, I have to live with my decision and ride out the downturn or bail.
lui
at 12:50 pm
If china goes down into the dumpster like some tv talking heads are saying the amount of money coming out china will become a tide wave of money when the millionaires need to find a safe haven for their undocumented savings.Canada should really put a flat tax of say %20 on any foreign buyers of real estate,its pretty sad when my neighbours tell me even with their good jobs they can barely afford to buy a 1000 sqft condo in Toronto,forget about a house.
Leanne
at 7:22 pm
Hello, I just came across this post now and if it is still active, I wonder if you opinion has changed now since the housing crisis in Vancouver is starting to unfold? Professionals are no longer able to purchase a home an hour from the city and others cannot afford rent. We have a huge housing issue on our hands and many homeless. The foreign buyers are snatching up everything at this point and people that were born here are fleeing the area.
Marcia
at 5:05 pm
We must continue to lobby our government to increase tenfold foreign buyers tax. Look at what happened in Vancouver. Now people can’t afford to live in Toronto. Tell the foreigners to deal with their own country to be able to own property – don’t visit your problems on us and use Canada as a private wealth collection. If you want to invest, then pay the price and allow Canadians to afford their own homes they work for.
Stop Doug Ford’s intention to repeal the foreign buyers tax. We need to tax way, way more!