In a crisis, everyone wants answers. Who did this? How did it happen?
But sometimes the causes that receive a major share of people's attention don't have an impact that is proportional to the hype.
One such example of that appears to be the effect of foreign buyers on Canada's metropolitan housing crisis. When cities like Toronto and Vancouver first came to the realization that they were in the midst of a major housing mess, foreign buyers became a popular cause to trumpet. So much so that both of those aforementioned cities ended up implementing foreign buyers taxes in 2017 and 2016, respectively.
Now, a new report based on data from Statistics Canada and the Canada Mortgage and Housing Corporation is showing that foreign buyers are actually a fairly minor factor in terms of market crowding and home price escalation, according to Reuters. Foreign housing ownership is under five per cent in both Toronto and Vancouver. While condo ownership by foreign investors is over seven per cent in each city, detached and semi-detached numbers are under 3.5 per cent.
Though there's always a chance of some misrepresentation in the data—especially if foreign buyers are having family members listed as primary homeowners—it is clear that foreign investment is not the overwhelmingly great influence that has caused home prices to skyrocket by 40-60 per cent over the past three years.