By Anna Steshenko
Last summer, as policy makers grappled with how to tackle soaring real estate prices in the Vancouver and Toronto areas, they encountered a major obstacle: there was no comprehensive database tracking all the potential variables at play, especially when it came to foreign buyers.
Now, a “massive” effort is underway at Statistics Canada to make sure that problem never arises again.
A team of more than 15 people is at work compiling the Housing Statistics Framework, an ambitious database that will contain everything from price information to owner demographics, on every property and piece of land in the country.
“It is a very challenging task,” said Haig McCarrell, director of the Investment, Science and Technology Division at Statistics Canada and the lead manager of the program, which was announced in the March federal budget.
“There is data on the real estate market, but the problem is that it is inconsistent. A number of studies had been done, but with no conclusions, because of missing information.”
In order to build the robust national database, McCarrell and his team are tapping both private and public sources, as well as pre-existing statistics such as census records.
Statistics Canada's public partners include provincial governments, land title authorities and non-for-profit organizations. The private sources cannot be named as per their agreements with the government agency.
“Private sources have a business model, commercialized data, so we have to make sure that we are not stepping on their toes,” said Anik Lacroix, an assistant director at Statistics Canada. “The issue is the limitations of agreements, it is how we release data, but asking private sources to provide more data is not a problem.”
Once the data is acquired, McCarrell said it must also be cleaned and packaged in such a way that it is consistent and can be of use to researchers and policy makers.
“For many middle class Canadians, their home is the most important investment they will make in their lifetime. As such, it is critical to their financial well-being that this investment be protected. HSF represents a significant jump forward in the quality and type of data available and will yield significant ongoing benefits by enhancing the ability of housing participants (and) commentators, to monitor and analyze the housing market,” said David Barnabe, a spokesperson of federal Finance Department, in an email statement.
Ottawa committed $39.9 million for five years in the March budget to see the project through.
The creation of the database will be facilitated by a National Property Register, which will keep tabs on every property in Canada, and information about their respective owners.
The Housing Statistics Framework would mine that data to generate statistics on foreign ownership, average prices, mortgage data, vacancy rates, property size and homebuyer characteristics.
The HSF will be renewed on a quarterly basis and is scheduled to be complete by the end of this year, though not all regions will receive their data at the same time.
“The data must be first provided to big real-estate markets, and so we are concentrating on Toronto and Vancouver,” explained McCarrell.
Foreign buyers in Ontario have been required to disclose their citizenship and residency status since May 6, 2017.
Last week, Ontario's Ministry of Finance released that province's in the area known as the Greater Golden Horseshoe.
They showed that the largest of foreign transactions was in York, north of Toronto, at 9.1 per cent, followed by Toronto proper at 7.2 per cent. In total, foreign buyers accounted for 4.7 per cent of real-estate purchases in the GGH .
Jason Mercer, a senior manager at Toronto Real Estate Board, said the new data being assembled by Statistics Canada will help prevent a re-run of last summer's uncertainty.
“We were asked what's the level of foreign buyer activity in Greater Toronto Area in July 2016 when the government was considering the foreign buyer tax, and we didn't know,” Mercer said.
“You make policy on solid empirical evidence. It is good to have agencies collecting and disseminating this data. It is certainly helpful for policy development.”