The Liberal government’s 2016 federal budget has provided $500,000 to Statistics Canada to delve into foreign ownership of Canadian real estate—a move that has been noted by some quarters as premature and insufficient, not the least because differentiating foreign buyers from other consumers is proving to be difficult.
In a March 24 interview with BNN
, Royal LePage president and CEO Phil Soper discussed the Statscan budget, which would allow the organization to develop methodologies that would help authorities better understand foreign ownership and the role that it plays, if any, in the country’s housing markets.
Soper pointed at the challenge of ensuring that any data gathered solely pertains to overseas real estate owners. The difficulty rises from the fact that Canadian cities have for decades played host to predominantly foreign neighbourhoods and communities, he said.
“If I look at the information or data from our front-line practitioners, it’s hard to distinguish between landed immigrants, foreign residents who may be family members of landed immigrants, and Canadians who just happen to be of, say, Chinese origin. And where do you draw the line?” Soper stated.
“It’s a big can of worms when you walk down this path, and I think what we’ll find in the end is that there’s more hysteria and reality, and that overall home prices in Canada are rising because we have low interest rates, and—in the two provinces where it’s happening [Ontario and British Columbia] —an expanded economy,” he added.
However, Soper also noted that any funding allotted to help the public understand the flow of money in the sector would do the most good for the markets’ health in the long run, as domestic consumers would be less threatened by overseas capital.
“Today, what we’re having is xenophobia around ‘foreign hordes’ driving up prices, pushing Canadians out of their homes, and I think that’s far from the truth. At least when we’re talking about actual data—for example, if we understood what housing classes, what neighbourhoods, what cities—I think what we’d find is it’s a very localized issue, as opposed to a pan-Canadian issue,” he explained.
Ultimately, Soper said that the Statscan funding should serve as a prelude to more extensive projects that would address the current knowledge gap.
“It’s a necessary first step. Part of the challenge here is the interplay between governments. You’ve got municipal governments, provincial governments, and federal government, that all have a role to play in this. It’s not a simple question.”