A new study on condo ownership in Winnipeg shows foreign investors are increasingly looking at the city as a good place to make some cash, which could mean higher home prices for local buyers.
A recent study by the Canadian Mortgage and Housing Corporation found a massive jump in foreign condo ownership in Winnipeg.
"Winnipeg has never really been seen as a place for foreign investment, yet looking at CMHC's numbers, we've had a tremendous rise in Winnipeg up to just under three per cent or getting close to some of the other big cities, so it's a surprising jump for Winnipeg," said Jino Distasio, director of the Institute of Urban Studies at the University of Winnipeg.
In 2014, just 0.1 per cent of the city's condos were under foreign ownership. In 2015, that number was 2.7 per cent, putting Winnipeg among the ranks of Vancouver and Toronto, where foreign ownership sits at 3.5 per cent and 3.3 per cent respectively.
Distasio said housing prices in the city remain low compared to other Canadian markets, but there has been a lot of growth over the past five to 10 years in Winnipeg's condo market.
- Real estate dreams dashed: Priced out and resigned to renting
- Winnipeg renters being pushed out by condos, says housing coalition
"What we've seen is certainly a dramatic rise in housing prices generally in Winnipeg over the last few years, but those prices are a lot more affordable in a Canadian context," he said. "Perhaps international buyers are now seeing Winnipeg as a credible place to park some money and potentially make a return on investment, like they've been doing in some of the big cities like Vancouver and Toronto."
The CMHC has reported in the past that increases in foreign ownership could push up prices for local buyers.
Distasio said the CMHC's study is the first time anyone has looked at foreign investment in condominiums in Winnipeg, and the next step is to determine who is purchasing the condos and why.
Winnipeg has never had a large inventory of unsold condominiums, but this may be an indication to risk-averse developers that there is a market for more builds, he said.