CMHC admits foreign investment could influence the housing market, and that more data is needed to better understand its impact.
"Both domestic and foreign investment activity can be speculative in nature, [but] foreign investment may be more mobile and subject to capital flight, and this may increase volatility in domestic housing markets,” Bob Dugan, chief economist with CMHC, told reporters and the public during a conference call on Monday. “Our findings show that as a percentage of the condominium stock owned by foreigners is relatively low.
“However, these findings may not be indicative of the annual share of sales to foreign buyers. These percentages may be higher than the overall stock percentages.”
The question was posed by a member of the public, which indicates Canadian citizens – and not just industry stakeholders – are keeping a close on the influence of foreign investment.
Dugan admitted it’s difficult to determine the level and impact of foreign investment because of limited data, noting most information at this time is anecdotal.
However, he also said CMHC is working to determine the best way to capture that data – including engaging in regular discussions within its own organization as well as with outside industry experts.
“From these discussions, we’ve identified a number of approaches to collecting data on foreign buyers, which includes using existing administrative data sets to estimate the level of foreign investment, expanding existing CMHC surveys to collect data,” Dugan said. “ … we’re working with real estate boards to see if we can collect data at the time of sale, and we’re doing the same with provincial property assessment corporations, land registries, to enhance their forms to see if we can collect information at foreign buyers at the time of sale.”
The latest foreign investment data collected by CMHC relied on a survey of condo owners. The findings were released in early April ; they indicated 10% of new-build condos in Toronto are foreign owned and 6% of newly-built condos in Vancouver are foreign owned.