OTTAWA Nov 30 Foreign ownership in Canada's top
condo markets dropped in 2016 after the introduction of a
foreign buyers tax in Vancouver, and remains a small fraction of
overall ownership concentrated mostly in newer buildings,
Canada's housing agency said on Wednesday.
The share of foreign ownership fell to 2.2 percent in
Vancouver in 2016 from 3.5 percent in 2015, the Canada Mortgage
and Housing Corp said in a report that suggested the August
introduction of a 15 percent tax on foreign buyers in that city
had dampened demand.
But buyers did not appear to have shifted to other Canadian
cities where the tax was not imposed, with foreign ownership
falling to 2.3 percent in Toronto from 3.3 percent a year
earlier. Foreign ownership in Montreal dipped to 1.1 percent
from 1.3 percent in 2015, the report showed.
Foreigners have been blamed for driving up prices in
Canada's hot housing market, particularly in Vancouver, where
locals believe wealthy Chinese buyers have made housing
unaffordable for ordinary Canadians.
The west coast province of British Columbia imposed the tax
on foreign purchases of homes in Vancouver, Canada's most
expensive housing market. Such purchases dropped almost
immediately, but crept back somewhat in October.
While government data has consistently shown foreign
investment to be a small factor in the housing market strength,
critics say the data is sparse and may not capture purchases
made by foreigners using local family members or corporations to
mask their origins.
The CMHC report said foreign ownership was highest in
buildings completed since 2010, and the role of foreign buyers
in new projects needs to be examined further.
"Foreign ownership is just one factor influencing Canada's
housing markets - but it's an important one that continues to
gain attention. Our studies show that the share of foreign
ownership remains low and concentrated in newer, larger
buildings located in the cores of major cities like Vancouver,
Toronto and Montreal," CMHC analysts Andrew Scott and Francis
Cortellino wrote in the report.
The report showed roughly half of the condo units owned by
foreigners in Toronto were in newer buildings, suggesting
offshore investors have helped drive the condo boom in Canada's
largest city. Still, foreign ownership even in newer buildings
was just 3.9 percent in 2016, the report said.
In Vancouver, foreign ownership in newer buildings was 5
percent, the report showed.
(Reporting by Andrea Hopkins; Editing by Meredith Mazzilli)