Toronto’s status as a leading, and still growing, tech hub will magnetize more and more foreign real estate investment, according to CBRE Ltd.
A major factor impelling this trend is the city’s growing immigrant and millennial population. CBRE stated that a significant proportion of this group is actively contributing to Toronto’s flourishing tech and financial services market.
“That spells money because young people have to consume, they’re growing families,” CBRE executive vice president David Ho told Bloomberg in an interview.
This is especially apparent in contrast to Canada’s other major urban housing market.
“That’s a huge advantage against the Vancouver market, which is more of a retirement market,” Ho explained.
Recent figures from CBRE backed up these observations. Toronto has considerably exceeded its 2017 volume with its $526 million in Asian investment volume last year.
To compare, foreign investment in Vancouver sharply declined to just shy of $350 million in 2018, a long way from the $1-billion-plus annual volumes of 2016 and 2017.
Moreover, Vancouver’s successive introduction of new regulations targeting foreigners is scaring off more and more investors. Speculation levies, a wealth tax on homes, and the recently proposed Landowner Transparency Act have proved especially discouraging.
“You have policy changes on a snap, on a whim,” Ho said. “Investors typically look at stability in a market and this is not stability.”
Avison Young principal Bal Atwal added that Chinese investment activity in Vancouver “had always been predicated on land, placing bets on land, whether it’s old shopping centres or office buildings even -- they see underlying development and land value.”
“They’re looking at Toronto now because they’re seeing a better arbitrage on that than they are here.”