The bad news for Toronto real estate prices keeps piling up, this time foreign buyers are dropping out of the market. New numbers from the Ontario Ministry of Finance tally up the number of non-resident buyers, a.k.a. foreign buyers, and they’re down significantly compared to previous release.
Foreign Buyers Across The GTA Are Down
The ratio of foreign buyers in the Greater Toronto-Hamilton Area (GTHA) dropped from the last report. This report, which tracked buyers from May 27, 2017 to August 18, 2017, counted 3.2% of sales to foreign buyers. The previous report, which tracked foreign buyers from April 24, 2017 to May 26, 2017, saw 4.7% of sales. Sorry for the obscure time frames, but the province decided using whole months was way too easy to understand.
Period 1: April 24, 2017 to May 26, 2017. Period 2: May 27, 2017 to August 18, 2017. Source: Ministry of Finance (Ontario).
Toronto Had 857 Sales To Foreign Buyers
The City of Toronto saw a significant decline of foreign buyers. The most recent report counted 857 non-resident sales, representing 5.6% of all sales in the city. This down from the first month of reporting, when 7.2% of transactions were from non-residents.
York Region Is Still The Top Spot In Ontario
Just north of the city, York region kept the title for region with the highest rate of foreign buyers. The most recent period counted 556 sales to non-residents, representing 6.9% of all sales. This is down 2.2 percentage points from the period before.
Regions With Minor Foreign Buyer Increases
Some low volume sales regions did see an increase in foreign buyers, just not a big one. Muskoka showed the largest gain with 13 homes sold to non-residents, representing 1.4% of all sales. Bruce County had the second highest gain, with 7 homes sold to non-residents. This brings the total number of sales in the region to 0.9%. Both regions are “cottage country” however, which means a good portion of these homes are only ever used occasionally.
When looking at these numbers, also remember to consider rebates, and seasonal factors. The numbers released by the province are before rebates are handed out. Once it’s determined who’s eligible for a rebate, these numbers will drop. This was also the case with the first set of numbers, which it appears the province has not adjusted yet.
As for seasonality, the limited data makes it unclear if this is a seasonal decline. Toronto real estate tends to be cyclical, with luxury property sales being concentrated in the spring. Since we have less than a year of data, we can’t make a hard conclusion that year-over-year activity is down. Hopefully by the time we get annual numbers, the numbers will have standardized periods.
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Looking at the data for York, one must realize that ‘foreign ownership’ is cumulative for ‘foreign buyers’. That is, foreign buyers don’t buy and sell, they buy and keep. Once a home is ‘foreign owned’, it will probably stay that way for quite a while. So although foreign BUYING may be decreasing, the percentage of homes that are foreign OWNED is still increasing.
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