Growing number of foreigners holding Canadian mortgages – study

by Ephraim Vecina09 Feb 2018
Nearly 10% of mortgages issued in Vancouver and Toronto in 2016 went to non-permanent foreign residents aged under 25 years old, according to the Canada Mortgage and Housing Agency (CMHC).

The federal housing agency noted that this upward trend has been consistent over a two-year period, which could mean that “younger NPR (non-permanent residents) may be receiving parental support to purchase homes.”

The CMHC’s latest study, which covered the mortgage issuance of the nation’s five largest banks, found that 3.9% of mortgages issued in Vancouver were held by non-permanent residents in 2016, increasing from 3.3% in 2014.

Meanwhile, 2.7% of mortgages issued in Toronto in 2016 were held by foreigners, growing from 2.1% in 2015 and 2.0% in 2014.

Read more: Foreign ownership of Canadian condos more prevalent than expected

While these represent just a small fraction of overall mortgage issuance, the rapid growth of purchase-capable foreigners aged 18 to 44 is shifting the buying and ownership demographics in Canada.

“Among the small group of mortgage holders under the age of 25, non-permanent residents represented an even larger share in Vancouver and Toronto at nearly 10 percent of total mortgages issued in 2016,” the CMHC report stated, as quoted by Reuters.

Foreigners, particularly Chinese nationals, tended to gravitate towards high-end properties, the report added. Single detached homes purchased by non-permanent residents were valued at an average of $1.65 million in Vancouver and $1.09 million in Toronto, significantly above the average values purchased by permanent residents ($1.42 million and $902,000, respectively).

COMMENTS

  • by Cullen Simpson 2/9/2018 10:40:28 AM

    How many are driving the average price upward and how long are they holding title before either cashing in on the higher price obtained a few years later and all levels of Government reaping the rewards of Land transfer taxes and if paid, capital gains.

  • by 2/9/2018 12:21:19 PM

    I
    Believe if not permanent resident
    We as a country are not to be giving mortgages to
    Non permanent residents
    Why would we allow the investor from another country to have access to our
    Banking or mortgaging
    If the market turns they will skip out
    This is not good
    If I go to USA or Mexico or France or any country
    They will not give me a mortgage
    Play cash or get financing from own country
    T

  • by JacobSpidey 2/14/2018 12:29:50 AM

    Could you share the link please?

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