Mortgage data from Canada’s five largest banks suggests a rising influence on housing markets by foreign buyers – many of them young people funded by their parents.
In Toronto and Vancouver, non-permanent residents represented nearly 10 per cent of buyers under the age of 25 who were issued mortgages in 2016, suggesting some “may be receiving parental support,” according to a report from the Canada Mortgage and Housing Agency.
Ontario followed in Vancouver’s footsteps last year when it introduced a foreign buyers tax as part of a package of measures designed to cool an overheated housing market. Prices in both cities – which had posted record increases that sparked fears of a housing bubble – soon cooled.
The CMHC study of Canada’s five largest cities found that in Toronto, foreigners held 2.7 per cent of mortgages issued in 2016, up from 2 per cent in 2014. In Vancouver, 3.9 per cent of mortgages issued in 2016 went to foreigners— a 3.3 per cent increase compared to 2014.