Are domestic speculators actually to blame for exorbitant home prices?

by Ephraim Vecina02 Nov 2016
A recent survey of the Toronto market revealed that domestic investors have significantly increased over the past few years, and is now standing at around 25 per cent of the buyers of the city’s properties
 
“I was actually surprised it was that high,” according to Ben Myers, who looks at housing trends for Fortress Real Developments.
 
“It's a large percentage of the market and much more concerning than foreign buyers,” Myers told CBC News, adding that overseas nationals comprise only around 5 to 10 per cent of home buyers in Toronto.
 
The analyst said that this development should come as no surprise.
 
“When you have a situation where prices are going up rapidly, you're going to see more investors,” he explained.
 
Another study conducted by real estate research firm Urbanation agreed with this observation, saying that domestic investors in Toronto are approximately 10 times more numerous than foreign buyers of the city’s high-rises.
 
Investor interest is drawing in “thousands of new buyers to the market who otherwise would not have been there,” Realosophy president John Pasalis said.
 
“It basically is adding a significant number of offers on every property and is driving up house prices as a result.”
 

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