Homeowners in Toronto and Vancouver believe that foreign investors are responsible for driving home prices upwards but there are no official statistics to support this theory.
“It has been a misconception among Canadian home owners for a few years that foreign buyers have been the cause of the housing shortage and escalating sale prices. However, statistics are showing that foreign buyers only make up 3.4% of the home buyers in the Toronto marketplace.” — Sean Kavanagh
A new Housing Market Insight from the CMHC shows that 48% of survey respondents in Toronto and 68% in Vancouver feel foreign investors have a lot of influence on home prices in their communities.
Official Statistics Canada data shows that total non-resident ownership is just 3.4% in Toronto and 4.8% of homes in Vancouver.
Vancouverites are more likely to believe that investors have more influence on home prices than supply restraints and demand-side factors.
Canadian Buyers are also spending more than planned in two of the hottest housing markets; 48% of respondents in Toronto and Vancouver had gone over their budgets, twice as many as those who did so in Montreal.
“Historically low interest rates and growing populations in our urban centres has more to do with the price increases, than from non-Canadians buying up the housing inventory. These statistics also demonstrate how public perception affects the demand for real estate in this country. The psychology of the home buyer is often the strongest factor in how the market swings.” — Sean Kavanagh
“The survey allows us to better understand how home buying is influenced by attitudes and perceptions, giving rise to sustaining local narratives. As we can see, psychological drivers can be at odds with economic fundamental drivers,” said Guillaume Neault, Senior Manager, Analytics, Canada Mortgage and Housing Corporation.