Foreign Buyers Flocking to Canada’s Hot Luxury Real Estate Markets
Two reports are shedding new light on the impact of foreign buyers on Canada’s luxury real estate market. One quarter of real estate advisors with Royal LePage say 25 per cent of luxury homes in key Canadian markets are being snapped up by foreign buyers. And a new report from Christie’s International Real Estate names Toronto and Victoria, B.C. as the second- and third-hottest luxury real estate markets in the world. Foreign buying is concentrated mainly in Toronto and Vancouver, according to Phil Soper, CEO of Royal LePage – Canada’s largest real estate company. Buyers are attracted to Canada’s stable political and financial systems and Canada’s reputation for cultural tolerance, diversity and openness to immigration. The low Canadian dollar makes Canadian luxury homes a relative bargain, Soper told BNN. “If you track the value of Canadian home prices – luxury home prices – in American dollars, they have actually declined over the past three years rather than increased,” he said. According to the survey, 67 per cent of advisors say foreign investor activity is up this year. About 60 per cent of advisers expect that trend to continue this year. Royal LePage polled 250 of its advisors who specialize in luxury property in February and March. The impact of foreign buyers in Canadian real estate markets has been a hot-button issue. The Canada Mortgage and Housing Corp. recently released a report on the impact of foreign buyers on the Canadian condo market and says it is continuing to monitor its impact on the market. In the recent federal budget Ottawa set aside $500,000 for Statistics Canada to study the issue. The increased interest from foreign buyers has driven prices through the roof. A luxury home in Greater Vancouver that sold for $2.6 million in 2005 would now fetch nearly $6 million dollars – an increase of nearly 125 per cent. The Royal LePage survey defined a luxury home as a property valued at no less than four times the average home price in the Greater Toronto Area, Greater Vancouver, Greater Montreal Area and Calgary markets.