The Impact of Foreign Buyers on Luxury Homes in Canada
The significance of foreign buyers in Canada's luxury real estate market has been the focus of a recent survey by Sotheby's International Realty Canada. The survey reveals that the bulk of foreign buyers in Canada are concentrated in the cities of Montreal, Vancouver and Toronto, with Montreal having the highest percentage of foreign buyers at 50%, Vancouver at 40% and Toronto at 25%. Calgary luxury real estate, which has foreign buyers at only 15% of its market, is mainly driven by Canada's young breed of buyers, increasing its number from the previous year.
According to the study, the dominant foreign buyers of luxury real estate in Montreal are from the U.S., China, Russia, Mexico and Syria, while in Vancouver, foreign real estate buyers are predominantly from China, the U.S. and Iran. Toronto real estate market, which has the highest volume of luxury homes sold, although with smaller percentage of foreign buyers, is dominated by China, the U.S., Russia, India and the Middle East.
A clearer perspective on the impact foreign buyers have in the country can be determined by the type of real estate investors these foreign buyers are, whether merely engaging in speculative real estate investments or more on diversification in property acquisitions. According to Ross McCredie, president and CEO of a company engaged in luxury real estate, most of his foreign real estate clients are members of affluent families with acquisitions of at least three real estate properties in various countries. This type of families can greatly influence the real estate market by either an influx or pull out of property acquisitions, dictating the trend or market composition of foreign investors in certain localities at a certain period of time.
Although the study reveals the significance of foreign real estate buyers in Montreal, Vancouver and Toronto, it is still the Canadian buyers who hold the larger share of the pie in the luxury real estate market in the country.
According to Ben Rabidoux, an Economic Analyst, although the recent study by Sotheby's is reflective of what has been accepted by realtors and analysts through the years, it is far from being conclusive of a general trend without having the solid figures to form as a basis.
At this point the greatest challenge is to obtain a solid compilation of concrete statistics, identify the real number of foreign buyers in the Canadian real estate market and prepare for where the market is headed.
Courtesy of: CBC News http://www.cbc.ca/newsPosted by Ross PAVL on