Foreign buyers prefer newer condos in Toronto, Vancouver, report finds

The CN tower is reflected in a high rise building behind a construction crane in downtown Toronto on Saturday, February 4, 2012. (THE CANADIAN PRESS/Pawel Dwulit)

A new report from the Canadian Housing and Mortgage Corporation has revealed that foreign buyers are scooping up newer condominium units in Toronto and Vancouver, two of the country’s red-hot housing markets.

The report, released on Thursday, examines the share of foreign ownership by the age of condominium. According to the findings, the overall rates of foreign ownership in the Toronto and Vancouver markets are low – 3.3. per cent and 3.5 per cent, respectively. However, the averages spike when it comes to newer builds.

In Toronto, the share of foreign ownership is less than 2 per cent for condos completed before 2000, and seven per cent for newer constructions completed after 2010.

“This variation is even more pronounced in Toronto Centre where about 10 (per cent) of the newer stock is owned by foreigners compared to about 2 (per cent) of the stock built in the 1990s,” the report said.

“This effect is even more pronounced in Toronto Centre where about 10 (per cent) of the newer stock is owned by foreigners,” the report said.

In Vancouver, the foreign buyers’ share of the market spikes from less than two per cent for properties built before 1990, to about six per cent for those completed since 2010.

The report noted that foreign buyers are perceived as “key players whose actions could have significant implications for Canadian housing markets.”

However, despite published statistics on the size of foreign ownership available factual information “remains scarce,” the CMHC said.

In February, BMO Nesbitt Burns senior economist Robert Kavcic warned against solely blaming foreign buyers for surging price gains in Toronto and Vancouver housing markets, saying a concentration of jobs and low interest rates are also behind spiking real estate prices.