“One thing I summarized was that the impact was greater than what I anticipated it would be. A full 25% of our group said 25% [of luxury houses] or more were going to foreign buyers,” Phil Soper, president of Royal LePage, which published the study, told Canadian Real Estate Wealth. “This is the opinion of 250 people. They are a select group, they’re all seasoned experts.”
The large Canadian brokerage released its 2016 luxury properties report Thursday, which included the findings of a survey taken by 250 real estate professionals.
The majority of respondents said foreign investment is increasing. Especially in Vancouver.
"One third (33%) of those polled in British Columbia believe that at least 30% of luxury properties are currently being purchased by foreign buyers and more than three quarters (79%) said that foreign buyer activity has increased since January 2015 (significantly – 33%; moderately – 45%),” Royal LePage said in the report. “A similar number (81 per cent) believe that foreign buyer activity has increased in the region since 2005 and 88 per cent expect foreign buyer activity will increase further in 2016.”
Investment in foreign real estate differs by region, according to Soper, who says Vancouver and Toronto are at the top end, with Quebec and Calgary at the bottom.
Because of this, Soper argues the overall impact of foreign investment on Canadian housing is small.
“The impact is very small. It is focused both geographically and by product type,” he said. “This piece of work was aimed at understanding better what had transpired in our luxury market in the past 10 years.”
And, similar to other studies focusing on this topic, Soper admits it has its faults.
“Where it gets a little bit dicey with this qualitative research is how to determine if someone is an immigrant, a Canadian citizen, or a foreign national if you aren’t gathering some citizenship metric,” he said. “It is a subjective study but it’s large enough that it’s allowing us to paint a picture of what’s happening in the luxury market nationally.”
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A study of luxury market home sales aimed to provide a glimpse into the influence foreign investment is having on various markets. The results were surprising to one leading voice in the industry.