Canada Mortgage & Housing Corp.’s search for data on offshore buyers comes amid pressure on politicians to get a better handle on foreign investment in the country’s housing market.
Photograph by: Tyler Anderson/Naitonal Post
, Tyler Anderson/National Post
Canada’s housing agency, looking for new methods to track foreign ownership in the country’s soaring real estate markets, may tap money laundering police and classify international university students as foreign buyers, according to internal documents.
Canada Mortgage & Housing Corp., the Crown corporation that backstops mortgages and tracks new housing data, has been in contact with at least eight government agencies to find data on offshore buyers in Vancouver, Toronto and Montreal as prices continue to soar, according to 486 pages of emails, briefing notes and other documents Bloomberg News obtained through a freedom of information request.
At this time, no existing tool can provide a definitive measure of the level of foreign investment in Canada’s housing markets, Karine LeBlanc, an agency spokeswoman, said in an email Friday. That said, CMHC regularly engages in discussions internally, as well as with industry experts, as part of its continued efforts to develop a program of work that would better capture data on foreign buyers.
The push for data comes amid concerns that foreign money is boosting prices, making housing unaffordable for locals and putting it at risk of a crash if the funds pull out quickly. Politicians have been under pressure from many quarters, including Vancouver Mayor Gregor Robertson and HSBC Holdings Plc to get a better handle on the numbers and consider measures to cool the inflow.
CMHC president Evan Siddall said in November that data collection on foreign investment was one of his priorities. Accurate and reliableâ figures, not just anecdotes, would help the agency gauge risk and instability, he said at the time.
Since then, prices have continued to accelerate, with the benchmark price of a detached home in Vancouver rising 27 per cent to $1.3 million in February from the same month a year ago. Toronto average prices have hit $1.21 million, and Montreal continues to draw overseas buyers.
A core team of analysts at CMHC held several meetings to discuss how best to tackle the data gap. Researchers had initial meetings with agencies including the Canada Revenue Agency and The Financial Transactions and Reports Analysis Centre of Canada or Fintrac, CMHC confirmed. Fintrac monitors money laundering and out-of-country transactions of at least $10,000. The documents show CMHC also planned or had meetings with the Bank of Canada, British Columbiaâs housing and property assessment agencies and the Department of Finance to start a data working group.
Throughout their internal meetings, the Ottawa-based agency laboured on the definition of a foreign investor. At one point, CMHC researchers considered delving into driver’s-licence data to determine whether a homebuyer was a foreigner, as visitors and temporary citizens can apply for a licence in Ontario. CMHC is no longer considering this option, LeBlanc said. In the end, the agency opted for a definition similar to one used by global real estate consulting firm Knight Frank LLP, according to LeBlanc.
That review includes international students, some of whom live in million-dollar homes near the University of British Columbia campus in Vancouver. Canadians whose primary residence is outside the country but make money off real estate in Canada may also be classified as foreign buyers, meeting minutes show.
The documents show CMHC worked with Statistics Canada and Citizenship and Immigration Canada to find that fewer than 18 per cent of international students in 2014 stayed to participate in a program that would make them eligible for citizenship.
CMHC is taking concrete steps this year. Itâs expanding the housing starts and completions survey to ask developers in Toronto, Vancouver, and Montreal to estimate the number of purchases by non-Canadians. CMHC is holding meetings with builders this year to discuss this and will compile the data at the end of the year, LeBlanc said. The agency is also working with real estate boards in those cities to discuss the best way of collecting data at the time of sale, she said. CMHC was also considering a survey of Vancouver realtors this year.
The agency has also started discussions with provincial land registries and assessment companies, including JLR Land Title Solutions Inc., Municipal Property Assessment Corp. and Landcor Data Corp., to see if CMHC could pull and compare property and mailing addresses. If someoneâs mailing address is different than their registered home address, it might indicate an investment property. If their mailing address is outside the country or a lawyer’s office, it could point to a foreign buyer.
Original source article: CMHC intensifies efforts to scrutinize foreign cash behind torrid housing market