International investors captivated by condo markets in Toronto and Vancouver may be the last to complain about new, tighter mortgage rules that could block first-time homebuyers from accessing starter condos, say analysts.
Those foreign buyers are often making their purchases with more than 20 per cent down, and well outside of the influence of the government’s tighter rules on maximum amortization, soon to be reduced to 25 years from the current 30.
That’s quite opposite to Canadian first-time buyers, largely dependent on that default insurance in order to limit their down payments to 5 per cent.
It’s likely that those frustrated buyers will increase the rental pool for new condo construction in Toronto and Vancouver, even if their departure from the purchase market lowers prices by as much as 5 per cent in the short term.
Foreign investor show little sign of backing away from the Canadian market, even with that correction.
According to a report, both Vancouver and Toronto are forecast to be this year`s most popular destinations for Chinese overseas property investment.
"Buying sentiment for overseas properties among Chinese mainland investors has been gaining strong momentum over the past few years," said Derek Lai, director of international properties for Colliers International real estate services -- the author of the report. "To date, about 20 percent to 40 percent of the foreign property investors in these ... destinations are from the Chinese mainland."
The report goes on to cite Vancouver`s Chinese population -- what it pegs as 30 percent of city residents -- as one of the driving factors for that investment choice.
Mainland Chinese investors are also lured by the Lower Mainland`s educational opportunities and proximity to home, according to Colliers.
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