Foreign investment in Canadian real estate is ramping up as buyers look to take advantage of favourable exchange rates due to the fallen loonie, according to a new study from Colliers International.
Over the last six months, foreign investors swooped in on commercial properties totalling $1.4 billion in US funds, up 143 per cent from the same time period in 2014, when investment equalled $574 million, says the American real estate firm in its All Signs Point North report.
“International investors are targeting highly sought after markets like Toronto and Vancouver,” reads the study. “Strong demand from both local and international buyers will boost competition for premium assets this year,” it continues.
A majority of foreign investment can be traced to the US. In fact, stateside investors were behind 48 per cent of the commercial property purchases over the past six months. That’s a leap from the 27 per cent recorded in the same six months a year before.
Chinese buyers were the second-most ambitious buyers, accounting for 42 per cent of this foreign investment, compared to just 5 per cent during the six-month period one year earlier.
“Over the past few years, foreign investment has been on the rise in Canada, with the United States accounting for a significant portion of direct investment. More recently, investors from Asia have advanced their positions, increasing their Canadian investments by over 90 per cent,” says Colliers.
Although Vancouver may be Canada’s hottest residential real estate market, Toronto is more than giving it a run for its money in the commercial segment.
In fact, Toronto properties accounted for the largest share of all foreign investments in Canadian commercial real estate last year, as 48 per cent of 2015 investments were rooted in the city. Vancouver, on the other hand, was where 42 per cent of the 2015 foreign investment took place.
Photo credit: Prime Tambayong