The CMHC analysis found that the number of foreign owners increased with each newly constructed high-rise condo building—a result that has been corroborated by other observers.
“I wouldn’t be surprised if 2016 is a record year when it comes to foreign investment in the condo market,” CIBC World Markets deputy chief economist Benjamin Tal told the Financial Post
“You are seeing more flow of investment into newer buildings,” Tal said. “This study suggests that the flow of money has become significant and it is definitely not slowing down.”
CMHC figures state that as of 2015, 6,790 units of the 91,650 condo spaces built since 2010 have been purchased by overseas investors. This was nearly double the volume compared to the previous year, when foreigners owned 3,482 of the 63,301 units constructed since 2010.
Tal pointed at the potential dangers of the runaway growth in prices and foreign ownership, mostly fuelled by an influx of Chinese investors.
“[The market is] vulnerable to a foreign economy and policies conducted by the Communist Party in China,” the economist said.
CMHC officials noted that the study is just the beginning of a deeper analysis of the complicated relationship between foreign buyers and Canadian housing. Chief economist Bob Dugan said that by Q3 2016, the agency would be looking at new home purchases involving all types of properties in Vancouver, Toronto, and Montreal.
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Offshore investment has long been cited by analysts as a crucial factor driving unprecedented price growth in Canada’s most overheated housing markets, but in a recent study by the Canada Mortgage and Housing Corp. (CMHC), it has become apparent for the first time the degree of influence that foreign money holds over the real estate sector.