Foreign buyers of Canadian residential property remain most active in the Greater Vancouver and Victoria markets, but the GTA is no longer their third choice.
RBC Economics says that Ottawa has now surpassed the GTA as a market of choice for international buyers.
Based on transactions between November 18, 2017 and February 16, 2018, foreign buyers cooled their investments in the GTA. Meanwhile, there was a slight increase in their activity in the Ottawa market.
The report notes that Ottawa’s higher position among foreign buyers is mostly due to their lower activity in the GTA following the Ontario government’s measures to curb the influence on the market of international buyers.
While the share of foreign buyers in the GTA fell from 5.9% before the introduction of the 15% foreign buyers’ tax, to 2.1% afterwards; there was a rise in Ottawa from 2.1% in April/May 2017 to 2.5% between November 2017 and February 2018.
Foreign buyers are not a concern right now
The RBC Economics report, written by senior economist Robert Hogue, says that there is little to fear from foreign buyers currently.
“It’s never been clear to us that they posed a threat to housing markets across the country, though we clearly saw evidence that foreign buyers were a factor behind rapidly rising prices in certain pockets and market segments of the Vancouver and Toronto areas,” he says.
He adds that those who were concerned about the role of foreign buyers on Canada’s hottest housing markets should be buoyed by their reduced involvement, while their continued stake in the market should offer confidence.