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Dec

Non-resident Ownership of Residential Properties in Toronto

Posted by Nicholas Searle ot 09:15 AM

After the Ontario government imposed a 15 percent tax on foreign buyers of Toronto property in May 2017 and everyone has been eager to see the impact. To study the effect, a collaborative project was begun between Statistics Canada and the Canada Mortgage and Housing Corporation (CMHC).

The results are now analyzed, and it appears that the percentage of homes owned by foreigners in Toronto and Vancouver is much lower than what people assumed. The new data shows that non-residents owned only 3.4% of all residential properties in Toronto. This means that foreign buyers are not pushing prices up and taking over the Toronto real estate market, as was implied by some media reports.

Non-resident ownership varied across housing types. Condos are the popular choice among foreign buyers. This makes sense given the fact that condos have existing property management teams and tend to require less maintenance compared to houses. The rate of condos owned by non-residents is 7.2% in Toronto. By comparison, it is much more prevalent than ownership of detached houses at 2.1%. For the other two types of residential properties, ownership rates for semi-detached houses are 2.6% and row houses 2.9%, respectively.

Non-residents seemed to own more expensive properties compared to Canadians. The value of detached houses owned by foreigners in Toronto was 12.3% higher than for Canadians. For condos, foreign ownership is valued at 8.7% more than the average Canadians. Condos account for about 20% of all residential properties in Toronto, however, they make up 44% of all properties owned by foreigners.

The report also showed that non-residents tend to own newer condominium apartments in Toronto that increase in value overtime. However, newer condominiums are also smaller in size and this can reduce their relative value. For location, non-residents focus on condo purchases in the downtown core of the city. This data is interesting and will be a long-term monitoring project, we will continue to follow. 


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