In a report Friday, Tal delved into a topic that is currently a major focus of policymakers: the impact of foreign investment on Canadian home prices.
There is a perception in some quarters that a major cause of high house prices in Canadian cities such as Toronto and Vancouver is foreign investors. Specifically, it has been alleged that foreign money is flooding into real estate in those two places, and pushing prices out of reach for those who actually live there.
Unfortunately, hard data on foreign money is hard to come by, as Canada does not yet reliably track such information — although recent steps from B.C. to track residency info of buyers is a step in that direction.
Canada’s national housing agency, the CMHC, says it is trying to collect more information on the topic, and Statistics Canada was earmarked half a million dollars in the recent federal budget to beef up its data collection on the housing market.
In the report, Tal draws a distinct line between foreign money where the buyer has an actual foothold in Canada, and speculative investments where the buyer has no incentive other than a financial interest.
The first is the more common type of foreign investment, Tal said after speaking with a group of real estate brokers who deal exclusively with foreign buyers. And moreover — it’s nothing to worry about.
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