Trudeau Wades Into Foreign Homebuyer Debate With Fundingby
Budget proposes C$500,000 in funding for Statistics Canada
Data on number of homes sold to foreigners "does not exist"
Canada will allocate C$500,000 ($383,000) to the country’s data collection agency to develop ways to determine foreign ownership levels in the country’s hot housing markets.
"Currently it is not possible to fully understand the role of foreign homebuyers in Canada’s housing market since a comprehensive and reliable data set on the number of homes sold to foreign homebuyers does not exist," according to the 2016 budget that Finance Minister Bill Morneau tabled in Ottawa Tuesday.
The government will grant the money to Statistics Canada over this year and next and may work with provinces such as British Columbia, where Vancouver, its largest city, has long been considered a magnet for Chinese home investors.
The Liberal government joins Canada Mortgage & Housing Corp. in trying to find the elusive data as prices continue to rise beyond average income growth in cities including Vancouver and Toronto. The country’s housing agency is working with Fintrac, the nation’s money laundering police, as well as surveying real estate developers and working with land title firms, documents obtained by Bloomberg News showed.
"Hopefully, governments at all levels will refrain from discouraging foreign investment in housing in a misplaced effort to create more affordable housing," Sherry Cooper, chief economic adviser at Dominion Lending Centres, said in a statement.
Other housing measures announced in the budget include C$2.3 billion over two years for affordable housing. About $208 million over the next five years will be injected into a new fund, administered by CMHC, that will help finance 4,000 new affordable rental units over that time. The government will also provide C$500 million annually in low-cost loans to cities and housing developers to build affordable rental housing projects, expected to create 10,000 new rental units over five years. About C$138 million over two years is allocated to CMHC to renovate housing on Canada’s First Nations reserves.
Philip Cross, a former chief economic analyst at Statistics Canada who worked at the agency for over three decades, was skeptical of the announcement, saying the money would have been better allocated to the government housing agency and that much more funding is needed than half-a-million.
Statistics Canada "hardly generates any real estate data of our own," he said by phone from Ottawa. "StatsCan has almost no comparative advantage for housing data." The C$500,000 could afford five researcher’s wages for a year and would not be enough to even plan a potential survey or data collection method, he said.