Despite a widespread perception that money from overseas is fuelling Canada’s housing affordability crisis, a new analysis suggests that the impact of these funds on the country’s home prices is much less than one might anticipate.
From 2016 to 2017, immigrants represented 46% of Toronto’s total population, and 41% that of Vancouver, according to Statistics Canada.
This was in the wake of an early January analysis by the Altus Group, which predicted that greater immigration will boost population growth, and in turn feed into greater residential sales activity.
However, StatsCan also found that immigrants tended to not purchase single-detached homes as much as Canadian-born buyers do. Immigrants only accounted for 43% of residential ownership in Toronto, and 37% in Vancouver.
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Around half of Toronto’s immigrant-owned homes were detached residences, while the figure was 60% for domestic owners. Meanwhile, Vancouver’s single-detached homes accounted for 39% of the market’s residential real estate owned by immigrants, compared with 48% for those born in Canada, Yahoo! Finance Canada reported.
“These data show that there is ongoing opportunity to reduce taxes on earnings for typical residents, and especially younger folks and renters who are particularly harmed by the current housing market, by taxing high home values more when owned by foreigners, immigrants and locally-born residents.” UBC professor Paul Kershaw said in an interview.
“Just focusing on wealth brought by immigrants will miss an important, and large, piece of the housing unaffordability puzzle.”