The current conversation surrounding foreign buyers is missing some valuable context, says a real estate executive
Foreign buyers have been mischaracterized as primary culprits in the current housing affordability crisis, according to the chief of a major real estate agency.
In a recent contribution to the Toronto Star, Gavin Swartzman, CEO of Peerage Realty Partners, said that while housing is inherently a political issue, public discourse has shifted into a troubling form: “the attacks by all three federal party leaders on the allegedly damaging role that foreign ‘speculators’ are having on Canadian real estate markets and their affordability.”
“The role of the scapegoat may be a time-honoured part of election rhetoric, but hard facts and figures provide valuable context,” Swartzman said.
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Taking the domestic condo market as an example, Swartzman cited figures from Peerage partner Baker Real Estate indicating that foreign buyers accounted for less than 5% of its more than 5,000 sales during the pandemic year.
“Historically, these buyers have played an important role in the domestic housing ecosystem by purchasing units, accepting the related risks and long timelines, and then renting them out,” Swartzman said. “So, in terms of housing capacity, foreign buyers account for less than one of every 20 of Baker’s sales in Toronto and Montreal and the assets they do own become part of the urban rental housing stock.”
Swartzman also cited the Condominium Apartment Survey by the Canada Mortgage and Housing Corporation, which said that the share of non-resident ownership in the nation’s condo apartments “remains low and stable.” The share was 2.6% in Toronto, 1.8% in Montreal, and 1.3% in both Vancouver and Halifax.
“Hardly the market-dominating distortion the politicians would have Canadians believe,” Swartzman said. “It is also worth noting that both China and India, the countries of origin for newcomers and investors alike, have toughened their capital export rules, making it more difficult to get money out of those countries.”
These make the current anti-foreigner conversation seem to be a “search of a problem that doesn’t actually exist,” Swartzman said. “In the end, all roads lead back to the lack of housing supply and its impact on affordability.”
