Foreigners have minimal interest in Ottawa condos, new housing data suggest

Non-residents own 0.7% of Ottawa’s condos, according to data released by the Canadian Mortgage and Housing Corp.
condos
Editor's Note

Correction: An earlier version of this story contained incorrect values for condos in Toronto and Vancouver.

One of the most comprehensive pictures of foreign home ownership levels across the country suggests that non-residents play a minor role in Ottawa-Gatineau’s real estate markets.

In Ottawa, foreign buyers – defined as individuals whose principal residences are outside of Canada – own 0.7 per cent of the city’s condos, the same percentage as in 2014, according to data released Tuesday by Statistics Canada and the Canada Mortgage and Housing Corp.

The ratio was slightly higher across the river in Gatineau, where non-residents own 1.1 per cent of all condos, up from 0.3 per cent in 2014.

The new data should water down any speculation that non-residents are fuelling the rise in Ottawa home prices. According to the Ottawa Real Estate Board, the highest monthly average sale price this year was $436,625. In 2014, it was $381,172.

Despite the apparent non-interest from non-residents in Ottawa property, some local realtors say they’re receiving plenty of interest from people looking to move to and live in Canada’s capital.

“We are ... seeing an increase in foreign buyers who are mostly choosing to relocate to Ottawa,” said Hanna Browne, a broker at Royal LePage Team Realty, in a statement last month. She adds these homebuyers are attracted by Ottawa’s affordability, lifestyle, strong economy and proximity to Toronto and Montreal.

Statistics Canada and CMHC went beyond condos and took a wider view of the real estate market in several other Canadian cities.

The conclusion, however, was largely the same: Foreign buyers make up a minuscule portion of the overall housing market in this country, but what they own is more expensive and newer than the average Canadian homeowner.

And there are indications foreign buyers are moving out of the traditional bases of Toronto and Vancouver and into new cities.

Non-residents owned 3.4 per cent of all residential properties in Toronto and 4.8 per cent of residential properties in Vancouver.

Largely what foreign buyers scoop up are newer, more expensive homes. In Vancouver, non-resident owners, as they're known, had homes valued on average at $2.3 million compared with $1.6 million for the owners whose primary residence was in Canada.

In Toronto, the average detached home owned by a non-resident was valued at $944,100 compared with $840,600 for residents, a difference of $103,500 or 12.3 per cent.

Foreign owners are stepping into the big-city condo market, where, again, what they own is more expensive than the what residents own. In and around Toronto, the average assessed value for a condo owned by a non-resident was $420,700, compared with $386,900 for a resident. In Vancouver, the figures are $692,000 and $530,800, respectively.

CMHC says that overall, foreign buyers owned less than one per cent of the condo stock in 17 metropolitan areas across the country.

The figures mark the first time that CMHC and Statistics Canada have measured foreign ownership in the country's hot housing market to see how much influence foreign buyers have over skyrocketing prices.

Ontario and B.C. have rules in place to dampen foreign interest in buying properties as investments.

The data from CMHC suggests that the foreign buyer tax in both provinces has shifted foreign ownership to other parts of the country.

The CMHC survey found that downtown Montreal and the city's Nun's Island had the largest increases in the share of non-resident owners over the last year. On Nun's Island, the rate went from 4.3 per cent in 2016 to 7.6 per cent this year; on the island of Montreal, the rate went from 0.9 per cent to 1.5 per cent.

"The lack of growth in Toronto and Vancouver, combined with the increases in Montreal, indicate the possibility of a shift from these centres after the introduction of foreign buyers' taxes in Ontario and British Columbia," CMHC chief economist Bob Dugan said in a release accompanying the data.

"Other factors attracting demand to Montreal include lower housing prices and a relatively strong economy."

The head of CMHC has publicly argued that foreign ownership is not the main driver for increasing housing prices. Evan Siddall has previously said that foreign ownership makes up less than five per cent of the housing market.

"Foreign ownership is a thing; it's not the thing," Siddall said in an interview earlier this year.

"The sources of demand that are pushing prices higher are many-fold and the sources of investment speculation … in the real estate part of our economy are many-fold and more domestic than foreign."

- With reporting by the Canadian Press