Why doesn’t Canada keep data on foreign property ownership?
Why does Canada not keep public data on investment ownership in real estate, whether by foreigners or homegrown residents? Douglas Todd of the Vancouver Sun wrote this interesting article in today’s paper:
The question is starting to gain more attention than when some of us in B.C. raised it earlier this year.
With Canadian cities, especially Metro Vancouver, becoming infamous for their unaffordability in regards to real estate, another voice has been added to those urging the federal Conservative government to at least collect data on the influence of investors — foreign and otherwise — on the country’s housing market.
The latest call for property ownership transparency comes on top of recent media reports in Canada that the real estate market of London, England, has become badly distorted by ultra-wealthy foreign owners, referred to as “non-domiciled residents.” The influence of such buyers, including many Russian tycoons, is said to be causing London’s housing prices to “lose touch with reality.”
If that’s what the British media are saying about London, what would they say about Vancouver, which Demographia judges the second most unaffordable city in the world, after Hong Kong.
Here is an excerpt from a new column on the need to collect foreign ownership data, by Toronto business writer David Parkinson. It’s headlined: “Canada’s housing numbers don’t measure up”:
“….a bigger concern are the numbers on investment activity in the housing market, particularly among foreigners. They don’t exist. Last week, some of the country’s top economists raised this issue with federal Finance Minister Jim Flaherty, who has acknowledged that he has no hard data on how much of Canada’s housing boom has been fuelled by investors who are looking to make money as property owners rather than acquire personal residences.
The distinction matters a great deal. A substantial downturn in the housing market – say, one triggered by government policy – would trigger a much bigger exodus of investors than permanent residents, and so the risks to the Canadian economy rise with the proportion of investor money pumping up the market. And yet Mr. Flaherty has been crafting policy aimed at cooling the market without that information. The Office of the Superindentent of Financial Institutions has been talking since mid-2011 about uncovering the amount of foreign investment in Canada’s real estate market – and yet we still have no visibility.
Cleaning up this muddle of inadequate housing data must be made top priority for Canada’s financial and statistical institutions. We can’t keep flying blind.”
