Additional foreign data insight revealed

by REP on 24 Jul 2017
Some more clarity on foreign buyers in one of Canada’s major markets, but is it enough to paint a clear picture?

Not quite yet, according to one leading bank.

“A new dataset now provides an answer: foreign buyers participated in 6.2% of all transactions that occurred from April 24 to May 26, 2017. The detailed snapshot of foreign buyer activity released this week by the Ontario government also provides a very interesting insight on their influence on prices,” Robert Hogue, RBC senior economist, said in a recent report. “Pockets where foreign buyers have been most active aren’t the areas where home prices have risen the fastest in the past year in the Greater Golden Horseshoe (GGH) region. This appears to fly in the face of the notion that buyers from abroad are the main culprits for runaway prices in the region.”

Toronto’s 6.2% foreign buyer share is lower than Vancouver’s 9.9% -- which was calculated in June 2016, a month prior to Vancouver announced its 15% foreign sales tax.

Toronto’s numbers were disclosed after Toronto’s implementation of the same tax.

While additional data is always appreciated, is this latest data set enough to provide a completely accurate picture of foreign investment in and around Toronto.

According to RBC – no.

“Does Ontario’s new dataset help answer another big question: were foreign buyers a driving force behind the runaway prices we’ve seen in the GGH region in the past year?” Hogue said. “The picture is still too sketchy to settle the matter at this point but we have some pieces of the puzzle. We can now say that foreign buyers didn’t cause the pockets where they have been the most active to become materially hotter than other areas of the GGH.”

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