There has been a lot of speculation about the impact of foreign property ownership on real estate prices over the past couple of years. In joint research from Canada Mortgage and Housing Corporation (CMHC) and Statistics Canada, we can finally see some numbers and what they mean for our local housing market.
The most important thing to note is that this study only examines condominium apartments and doesn't cover other property types like single-family homes or townhouses. Overall, the amount of property owned by non-residents in Victoria stayed flat between 2014 and 2017, at 1.1% of the stock. Even the supposedly hot investment markets of Vancouver and Toronto have had consistently low and stable levels of foreign ownership during this time.
However, the trend of non-resident buyers purchasing newer, more expensive properties is something that does show up in the data. Non-residents own 1.9% of condos built between 2000 and 2009, compared to 1.1% of the overall units in Victoria. Similarly, the share of non-residents who own apartments in buildings with 50 units or more is higher (between 1.4% and 1.7%) than the overall amount; more units tend to mean more amenities in the building, and therefore a higher property value.
We are finally on the way to seeing how much non-resident ownership of properties influences the price in the housing market. While it is one factor to consider, it is definitely not the only one; housing and land supply, as well as the economic and demographic fundamentals driving housing demand all need to be taken into account. Hopefully this study is the first step to implementing policies that will make housing more affordable for all Canadians.
The Auxilium team stays on top of the latest news and industry changes to keep you informed. If you're ready to get started on your home purchase, mortgage renewal or refinance, set up a free consultation with one of our planners today: call us toll-free at 1-855-590-6520 or visit us at 307 Goldstream Avenue during regular business hours. We can also arrange an appointment evenings or weekends to work with you.
Auxilium Mortgage Corporation is based in Victoria, BC and works with clients locally and across Canada. The Auxilium team has over 100 years of combined financial experience and access to dozens of lenders to help you meet your goals.
Sources
CMHC news release: https://www.cmhc-schl.gc.ca/en/corp/nero/nere/2017/2017-12-19-0830.cfm
Statistics Canada news release: http://www.statcan.gc.ca/daily-quotidien/171219/dq171219b-eng.htm
