Foreign Buyers Are Purchasing Canada's Luxury Homes

Canada's national housing agency is exploring how to track foreign-ownership in the country's real estate markets and thinks overseas buyers account for a large portion of the demand for luxury homes throughout Toronto and Vancouver, The Wall Street Journal reported. 

Canada Mortgage and Housing Corporation President Evan Siddall said the agency will turn to real estate agents, developers and land registry offices to gather the information. The information they're focusing on is the annual residential sales to foreign buyers. 

During a speech in Toronto, Siddall said, "The presence of foreign investment can also contribute to housing market vulnerabilities, such as overvaluation." Recently, Canada was rated among the top countries with overvalued real estate markets.

"In Vancouver and Toronto, for example, it is very possible that foreign buyers account for a substantial portion of the demand for pricier, luxury single-family homes," Siddall added. 

As of September 2015, home prices increased nearly 14 percent in Vancouver from the previous year according to the Canadian Real Estate Association and in Toronto, there was an increase of nearly 10 percent from the previous year. 

There has been evidence of overvaluation and overbuilding to the point where home prices "are not fully supported by economic and demographic factors," the article reported. 

Siddall's comments emphasized the need for more information and added that most of the information available is "anecdotal."