Canada and foreign buyers is a theme that has been put under the spotlight in the recent months, due to new regulations aiming at limiting the price increases in Ontario and British Columbia. But how big exactly is the market of international buyers in Canada, in the regions where they are most active ?
Foreign buyers in British Columbia
In the region of British Columbia, “Foreign buyers accounted for six per cent of the value of residential property (…)over the past year, according to the latest data released Wednesday by B.C.’s Ministry of Finance.”
What is more, this represented over 3 billion dollars worth of transaction : “”Despite the tax, the majority of B.C. foreign buyer transactions from June 2016 through May 2017 — $3.27 billion worth — happened in Metro Vancouver.” (Source : Ministry of Finance of B.C. – article on VancouverSun)
In some specific localities, foreign buyers seem to seize an even bigger share of the market as we could read on GlobalNews.ca: with for example 9.7% of transactions in Vancouver made by foreign buyers as you can read below:
“The breakdown by municipalities for number of real estate transactions made by foreigners:
- Metro Vancouver: 9.7 per cent (10 per cent of $ value)
- City of Vancouver: 10.9 per cent (10.4 per cent of $ value)
- Richmond: 18.2 per cent (19.1 per cent of $ value)
- Surrey: 8.4 per cent (8.4 per cent of $ value)
- Burnaby: 17.7 per cent (15 per cent of $ value)”
Foreign buyers in Ontario
Foreign buyers make up 4.7% of home sales in Ontario’s Golden Horseshoe area as you can read on CBC.
In Toronto in particular, as prices skyrocketed (average price of a detached house in the Greater Toronto Area was up 33 per cent, to $1.21-million), and in Ontario in general, measures were taken to try and reduce the impact of foreign buyers. Indeed, Ontario decided to impose a 15% tax on residential properties purchased by individuals who are not Canadian citizens or permanent residents and by foreign corporations. That measure was only one among sixteen measures as you can read here.
Therefore for some real estate actors, foreign buyers represent much more than 5% of their business: “Richard Silver, a Sotheby’s realtor and past president of the Toronto Real Estate Board, estimates close to 20 per cent of his clients are international buyers – from China, India and the Middle East – interested in the luxury condos and houses he sells in and around the downtown core.” (Source: GlobeAndMail)
So how big is this market ? According to the government data, this is 4.7% of 18282 transactions, therefore 860 transactions. As the average selling price for all properties (in May 2017) was $863,910, this would make of foreign buyers in Ontario a market of 743 million dollars.
Foreign buyers in Quebec
While foreign buyers are reported to represent only 1.5% of transactions in Montreal as reported by ViaCapitale, the area is increasingly attractive for foreign buyers and it saw a 40% year on year increase in the sales to foreign buyers.
Interestingly enough, the number of properties bought by Chinese buyers in Montreal rose by 200% year on year, according to a JLR study.
While it should grow over time, this market of foreign buyers in the Montreal area already weighs about half a billion dollars, as in 2016 not less than 770 foreign buyers (average transaction price of 720.000 dollars for Chinese buyers, and around 400.000 dollars for American and European buyers).
If the measures adopted in Ontario and British Columbia succeed, they may very well push foreign buyers to look more at Quebec in the coming months.
Although the latest full report on foreign buyers by JLR dates back from 2013, a look at the nationalities is quite enriching as it shows that buyers from the United States, Europe, China, France but also “All Others” are quite similar in terms of proportion:
How big is the market of foreign buyers in Canada, nationwide ?
Unfortunately there does not seem to be a national authority, and data is collected at a regional level. However, cumulating the figures of British Columbia (3.27 billion dollars), Ontario (743 million dollars) and Quebec (500 million dollars), we get to over 4.5 billion dollars worth of transactions.
We would truly hope that in the future Canadian authorities can compile their data and give a national report like the National Association of Realtors does in the United States.
Thanks for reading my latest article on foreign buyers in Canada. For more information on foreign buyers in other countries, please consult this page or reach out to me by message directly.