FOREIGN MONEY FLOWING INTO CANADIAN CONDOS: REPORT.

Fresh data on foreign ownership of condominiums in Toronto from Canada Mortgage and Housing Corp. points to an upswing in offshore money making its way into the country’s largest city.

For the first time, the Crown corporation broke down offshore investment by the age of the buildings and it’s becoming increasingly clear that, as every new high-rise condominium goes up, so does the percentage of foreign owners.

“You are seeing more flow of investment into newer buildings,” said Benjamin Tal, deputy chief economist with CIBC World Markets.

“This study suggests that the flow of money has become significant and it is definitely not slowing down. I wouldn’t be surprised if 2016 is a record year when it comes to foreign investment in the condo market,” Tal said.

CMHC says that of all new buildings completed since 2010 in what it calls “Toronto Centre,” about 10 per cent have been purchased by people from abroad, up from 2.3 per cent in the 1990s.

In its April report, called Housing Market Insight, CMHC looked at the city of Toronto, its central core and the census metropolitan area (CMA). It also looked at Vancouver’s CMA and 14 other Canadian markets.

CMHC acknowledged the topic of foreign ownership has “gained in importance” and cited media for generating that level of interest.

“The general perception is that foreign buyers are key players whose actions could have significant implications for Canadian housing markets,” the report states.

The agency, which advises the government on housing policy, says there has been a range of statistics from various studies on foreign ownership but maintains “factual information” is scarce. It says the annual condominium vacancy survey, which CMHC has been conducting since 2014, fills in some of the gaps.

It noted that as of 2015 in the Vancouver CMA, about six per cent of buildings built since 2010 were owned by foreigners, which compares with 7.4 per cent for Toronto’s CMA for buildings constructed in the same period. No smaller areas within the Vancouver CMA were broken out in the report because CMHC said it did not have reliable data.

Tal said the concern is that foreign investors bring an element of vulnerability because they can leave the market for reasons beyond Canada’s control.

“You are vulnerable to a foreign economy and policies conducted by the Communist Party in China,” he said, referring to Chinese buyers who are thought to be a large percentage of offshore buyers in the market.

Even as prices have risen in some Canadian housing markets, property is cheaper for offshore investors because of the weak loonie, Tal added.

Shaun Hildebrand, vicepresident of condominium research company Urbanation Inc. said that if you look at the raw numbers of condominium units under construction in Toronto’s CMA you get a more dramatic picture of the dominant nature of foreign investment.

In 2014, CMHC found that of the 63,301 condo units built since 2010, 3,482 were purchased by foreign investors. By 2015, 91,650 condo units had been built since 2010 and 6,790 were purchased by foreign investors — a dramatic 95-per-cent increase in activity.

“It suggests the huge increase in condo completions in Toronto is coming from foreign investors,” Hildebrand said.

Across the country, Regina had the lowest percentage for all buildings owned by foreign interest in its CMA at zero per cent. Based on all condominium buildings, regardless of construction, Vancouver was tops at 3.5 per cent foreign ownership for its entire CMA.

In t he t hird quarter, CMHC plans to look at foreign- ownership levels of all new home sales in Vancouver, Toronto and Montreal.