Skip to main content

Streetwise Are foreign investors driving up Canada's housing prices?

A file photo of many for sale signs hanging out front of a condo development in Vancouver.

LAURA LEYSHON/laura leyshon The Globe and Mail

As debate heats up about the degree to which Toronto and Vancouver's housing markets are overheated, there is a lot of talk about the role that foreign investment money is playing.

And it's a bit frightening to realize that not even the government knows the answer.

During a discussion with the Globe and Mail's editorial board, Finance Minister Jim Flaherty acknowledged that Ottawa doesn't have a good grasp on the amount of foreign money in the Canadian housing market.

Story continues below advertisement

"It's mainly anecdotal, so I don't have a statistical grasp of it, no," he said, adding that he hears about lots of people in emerging economies paying cash for condos in Toronto and Vancouver.

A number of economists worry that foreign speculators are driving up the price of condos.

Bank of Montreal chief economist Sherry Cooper said in a note Friday that, while Toronto's condo boom still pales in comparison to what's happened in Spain or the U.S., lessons must be learned from those experiences.

And one of those lessons? The role of foreign investment.

"For nearly a decade starting in 1999, house prices exploded in Spain as both domestic buyers, and more notably, foreign buyers poured money into residential real estate," Ms. Cooper wrote. "Europeans, Russians and others were using the Costa del Sol as their vacation hideaway and condo building in all parts of Spain exploded."

Canada's not known as a vacation hideaway, but real estate agents have tales about foreign investors scooping up literally dozens of condo units at one time – tales that, if true, suggest there's a fair degree of speculation in the market.

Report an error Editorial code of conduct
Tickers mentioned in this story
Unchecking box will stop auto data updates
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

Cannabis pro newsletter