Foreign ownership, speculation perceived to be the most influential factors
According to the latest Housing Market Insight report released earlier this week by the Canada Mortgage and Housing Corporation (CMHC), a significant fraction of buyers in the most hotly contest housing markets believe that foreigners have a major influence in driving up home prices.
Over two-thirds (68%) of those polled in Vancouver pinned the blame for elevated housing sale prices on foreign entities, while the figure was nearly half (48%) in Toronto and 42% in Montreal.
Canadians are not looking at just ownership as the only way that foreigners are influencing the country’s housing markets, CMHC stated. This also included “the influence of capital in driving up home prices,” pointing at speculation as a crucial element in the dynamic.
“In Vancouver, the influence of investors is perceived to be stronger than supply constraints and demand side factors,” while in Toronto, “the perceived influence of investors is more in line with supply constraints and demand side factors.”
However, numbers from Statistics Canada showed that the proportion of foreign home owners (across all property types) is 4.8% in Vancouver and 3.4% in Toronto – and the CMHC argued that this, more than anything, emphasizes the report’s observation that it is mainly perception rather than objective reality that drives Canadians to blame foreigners.
“The results in the home buyer motivation survey cannot be compared directly with the results in the survey on non-resident owners,” the report concluded. “What is striking is the significant gap between perceptions of the public and available data, so much so that the perception of non-resident ownership takes centre stage when discussing the drivers of price growth