October 2014
It is estimated that 30% of new condos are purchased by foreign buyers. Some condo buildings are built by foreign-based developers who make units available in their home country.
Foreign purchases of condos occur for personal or business reasons:
- An investment to protect assets or earn a return
- A home base during business travel
- An ownership stake to help obtain immigrant status
- A residence for children attending school on a student visa.
Among foreign buyers, Toronto is popular for having a stable real estate market. While other countries have experienced dramatic valuation shifts Toronto has thus far been immune. Toronto also offers a unique combination of advantages appealing to foreign buyers:
- Low interest rates
- Simplified foreign ownership regulations in Canada
- Easy access to advisors who cater to foreigners and can speak their language.
Foreign interest in Toronto condos began in the 1970s among European buyers. When the U.K. prepared to return Hong Kong to China, Toronto became a destination of choice for many who did not want to live under the control of China. For those relocating to Toronto, new suburban housing was built. Many who stayed in Hong Kong chose to protect their assets by investing in Toronto condo towers.
More recently condo buyers have come from Russia, the Middle East, mainland China and India. Toronto remains more economical than New York, Tokyo or London. Unlike Greece or Spain, investments in Canada are not likely to dramatically drop in value.
Many choose to purchase their property with cash. It is estimated that over $3 trillion dollars has left Russia and China over the past decade. Some of this money has arrived in Toronto and been used to purchase condos. Many from Iran have invested their money in condos ahead of a government ban on movement of domestic currency from that country. India has also seen a migration of currency from their country.
The simple reality is that Toronto has developed into a popular place to live. It remains safe, fun and relatively easy to navigate. This has and continues to attract people from not only other places in Canada but around the world.
