The Global Appeal of Toronto and Vancouver

05/06/2025

Industry Insights International Outlook

Stable Economy and Safe-Haven Status

International investors are drawn to Toronto and Vancouver for their economic stability and reputation as safe havens. Canada’s strong banking system and resilient economy have consistently placed it at the forefront of G7 investment destinations. Unlike more volatile markets, Canada offers a secure environment with strict financial regulations, prudent lending practices, and a stable democracy. During global turmoil, capital often flows into Canadian real estate – as one industry executive noted, “the crazier the world gets, the better Canadian real estate looks” to investors. Both Toronto and Vancouver benefit from this safe-haven appeal. Investors from regions facing political or economic instability (from China to the Middle East) see Canadian property as a reliable store of wealth. The country’s stable political and legal system ensures property rights are protected, giving international buyers confidence that their assets will be secure. It’s no surprise that a leading Canadian real estate report observed that Canada’s stable political and financial systems make it an “ideal destination” for wealthy international buyers looking for long-term investments.

Despite recent interest rate fluctuations and economic challenges worldwide, Canada’s fundamentals remain strong. The Canadian dollar’s exchange rate has often been favorable for foreign buyers, effectively giving them a “discount” on real estate prices when their home currencies are stronger. This was especially true in the mid-2010s when a weaker Canadian dollar and low global interest rates made high-end properties in Vancouver and Toronto more affordable to overseas investors. Even today, many international buyers view Canadian real estate as a conservative, long-term play – prioritizing stability and asset preservation over speculative quick gains. Toronto, as the financial capital of Canada, is home to the headquarters of major banks and corporations, underscoring the city’s robust economic foundation. Vancouver, with its strategic Pacific Rim location and diversified economy (including finance, natural resources, tech, and tourism), also provides a stable backdrop for investment. Together, these cities offer the kind of low-risk profile that appeals to global investors seeking refuge from uncertainty.

Thriving Economies and Long-Term Growth

Toronto and Vancouver boast thriving local economies and strong growth prospects, which continue to lure foreign capital. Toronto is Canada’s largest city and economic engine – a global financial center and tech hub with a GDP rivaling some countries. Multinational companies, from finance to artificial intelligence, have major operations in Toronto, driving employment and housing demand. Vancouver’s economy, while smaller, is extraordinarily vibrant: it is a gateway for trans-Pacific trade and home to industries such as film production, biotech, and tourism. Both cities enjoy low unemployment relative to many global peers and have seen steadily rising incomes and development. These economic strengths translate into robust real estate markets that international investors want to be part of. In fact, a recent analysis by Fiera Real Estate dubbed Canadian real estate “the world’s best kept secret” due to Canada’s productivity, technological progress, and solid fundamentals. For investors taking a long view, the growth trajectory of these cities signals an opportunity for steady appreciation and income.

Population growth is a big part of the long-term growth story. Canada is experiencing an unprecedented influx of people, which directly fuels real estate demand. The federal government is targeting upwards of 500,000 new permanent residents each year in 2024, 2025, and 2026 – the highest immigration levels in Canadian history. Many of these newcomers settle in the greater Toronto or Vancouver areas, drawn by the economic opportunities. This surging population contributes to housing demand across the spectrum, from rental apartments to single-family homes and commercial space. Notably, Canada’s housing supply has not kept pace – it has the fewest housing units per capita in the G7. For investors, this imbalance of high demand and limited supply creates a compelling case for sustained price growth and low vacancy rates. Toronto, for example, is undergoing a construction boom (with hundreds of cranes on its skyline building new condos and offices) yet still can’t build fast enough to meet demand. Vancouver’s geographic constraints (nestled between ocean and mountains) mean land is limited, further tightening supply. The combination of strong economic growth, rising population, and constrained housing stock suggests that both cities’ real estate markets have long runway for expansion – a key reason international investors continue to focus on them.

World-Class Quality of Life and Livability

Beyond financial metrics, Toronto and Vancouver offer an exceptional quality of life that few other cities can match. This is a critical factor for international investors, especially those looking to own not just an investment, but a foothold in a city where they or their family might live, work, or study. Year after year, Vancouver and Toronto rank among the world’s most livable cities. In the Economist Intelligence Unit’s 2023 Global Liveability Index, Vancouver and Toronto both landed in the top 10 globally. Vancouver, in particular, is renowned for its stunning natural scenery – from snow-capped mountains to the Pacific coastline – and a mild climate that contrasts with much of Canada. It offers a lifestyle rich in outdoor recreation, clean air, and green spaces, which is highly attractive to overseas buyers. Many wealthy investors from Asia and beyond have been enchanted by Vancouver’s beauty and calm, viewing it as an ideal place to own a second home or retire. The city’s vibrant multicultural society and arts scene also contribute to its global appeal.

Toronto, for its part, is a cosmopolitan metropolis teeming with cultural attractions and diversity. It is consistently celebrated as one of the most multicultural cities in the world – roughly half of Toronto’s population was born outside of Canada. This diversity means international investors and new residents can quickly find communities that speak their language, cater to their cuisines, and celebrate their cultures. From world-class restaurants and shopping to museums, theaters, and sports, Toronto offers the full urban experience. It also hosts top-tier healthcare and educational institutions (more on that below) which enhance its livability. Safety is another component of quality of life: both Toronto and Vancouver have low crime rates relative to many global cities, with stable, well-managed local governments. For investors from regions where personal safety or political stability is a concern, the peace of mind that comes with Canadian cities is a selling point. Simply put, these are cities where people want to live – and that desirability underpins long-term real estate value. International buyers often cite lifestyle factors as a reason for choosing Toronto or Vancouver over other investment destinations. Whether it’s Vancouver’s oceanfront setting and leisure opportunities, or Toronto’s dynamic city life and cultural richness, the lifestyle ROI is evident. Properties in these cities confer not just financial returns, but a piece of an enviable way of life.

Immigration, Education and Cultural Ties

The human element – immigration and cultural connectivity – plays a major role in why Toronto and Vancouver remain popular among overseas investors. Canada’s immigration-friendly policies have made it a magnet for talent and capital from around the globe. Many affluent families from Asia, the Middle East, and Europe have children studying in Canadian universities or plans to eventually relocate to Canada. Purchasing real estate in Toronto or Vancouver is often the first step in that journey. For example, a parent in Beijing or Mumbai might buy a condo in Toronto for their child attending the University of Toronto, or a house in Vancouver as a long-term family asset. These cities are home to top-ranked universities and colleges that attract tens of thousands of international students every year. The presence of these students creates a steady flow of foreign capital into the housing market, as families invest in residences for accommodation or long-term investment. Moreover, both Toronto and Vancouver have well-established immigrant communities and diaspora networks. Vancouver’s metro area has a large Chinese and South Asian population, and is sometimes called “Hongcouver” due to its historic influx of Hong Kong investors in the 1990s. Toronto’s immigrant communities span the globe – from huge South Asian and East Asian populations to Europeans, Africans, and Latin Americans. Such diaspora networks encourage further investment, as people overseas feel comfortable investing where they have family or community ties. There’s a trust factor; an investor in Dubai or Shanghai is more inclined to buy in a city where they know friends or relatives have already settled successfully.

The multicultural fabric of Toronto and Vancouver not only attracts immigrants but also foreign capital looking for culturally familiar markets. Businesses from abroad also see these cities as natural expansion targets due to language and community ties (for instance, many Chinese developers and investors have satellite offices in Vancouver). Culturally, Canada prides itself on being welcoming and inclusive, which helps foreign investors feel their participation is valued. The Government of Canada actively promotes immigration and foreign entrepreneurship, which in turn stimulates real estate investment in housing, retail, and commercial developments to serve the growing population. In short, immigration is a virtuous cycle for real estate: it drives demand and also creates bridges that make international investment easier. Toronto and Vancouver epitomize this cycle – they are global cities not just in economic terms but in their people, and that global character reinforces their popularity among international investors.

Luxury Real Estate and Global Investor Preferences

Both Toronto and Vancouver have high-end real estate markets that rank among the most desirable in the world. Ultra-rich investors often include these cities on their list of targets for luxury property acquisitions, alongside places like New York, London, or Sydney. In Vancouver, luxury real estate has been a major draw for international wealth. Prestigious neighborhoods such as Point Grey, West Vancouver, and Shaughnessy are famous for their mansions with ocean and mountain views, many of which have been bought by overseas buyers over the years. It’s estimated that in the peak years of the 2010s, foreign buyers accounted for over a quarter of luxury home purchases in Canada, with Vancouver attracting the lion’s share of that interest. Buyers from China in particular have long been active in Vancouver’s luxury segment, drawn by the city’s beauty and the prestige of owning property there. Toronto’s luxury market has likewise seen significant foreign activity – from lavish penthouses downtown to expansive estates in suburbs like Bridle Path. International investors view these trophy properties as both status symbols and reliable investments. Even if they don’t plan to occupy them full-time, owning a marquee property in a stable country is a way to diversify wealth.

Crucially, the luxury market in both cities has proved resilient. Even when local demand cools or governments impose new taxes, the very high end often continues to transact thanks to international interest. Wealthy buyers are less sensitive to additional taxes or market fluctuations; for example, Vancouver’s 20% foreign buyer tax (implemented in 2016) did dampen some speculative buying, but multi-million-dollar mansions still found buyers willing to pay a premium to enter the market. In Toronto, luxury condos and homes have continued to sell to international purchasers, some of whom buy via local relatives or corporate entities to navigate regulations. The enduring appeal of luxury assets is also because they offer unique qualities – irreplaceable locations, landmark architecture, or scarce waterfront land – that hold value. International high-net-worth individuals (HNWIs) often follow a portfolio strategy of holding real estate in multiple global gateway cities; Toronto and Vancouver remain on that map because of their strong fundamentals and lifestyle allure. As Phil Soper, CEO of a leading real estate brokerage, noted in a past report, Canada’s stability and rule of law make it an ideal destination for wealthy purchasers looking to invest for the long term. This sentiment continues to drive interest in luxury segments, ensuring that Toronto and Vancouver’s prime properties are on the radar of investors from New York to Beijing.

Opportunities in Commercial Real Estate

It’s not only homes that attract international capital – commercial real estate in Toronto and Vancouver is a major draw as well. Global investors, including institutional players like pension funds and private equity firms, have been actively investing in Canadian commercial properties. In fact, nearly 50% of all commercial real estate investment in Metro Vancouver in a recent year was driven by foreign capital. From office towers and retail centers to large apartment complexes and hotels, international buyers see value in the stable returns offered by Canadian commercial assets. Toronto, with its status as a financial hub, has seen significant foreign investment in office buildings and industrial parks. A notable example is the 2023 acquisition of a majority stake in a Toronto-area industrial portfolio by a U.S.-based firm, a deal valued at nearly $1 billion. Vancouver likewise has had marquee deals, such as a German investment fund purchasing downtown Vancouver office towers. These high-profile transactions underscore that overseas investors view Canadian commercial real estate as a solid long-term bet, often comparing it favorably with opportunities in the U.S. or Europe in terms of risk-adjusted returns.

One reason commercial properties remain attractive is that they are not subject to the same foreign buyer restrictions as residential homes. Canada’s recent foreign buyer ban (discussed below) does not apply to commercial real estate or multi-unit residential buildings larger than three units. That means foreign investors can still directly purchase apartment buildings, offices, warehouses, and other income-producing properties without prohibition. This has channeled more international interest into these sectors. For example, an investor who might have once bought luxury condos in Vancouver may now opt for a multi-family rental building or a hotel, which are permissible investments. Both Toronto and Vancouver have very tight rental markets – low vacancy rates and strong rents – making multi-family properties particularly appealing for yield-seeking investors. The influx of population and constrained housing supply translate into reliable occupancy for rental buildings. Similarly, the retail and industrial segments benefit from Canada’s growing consumer base and logistics needs. Foreign investors often partner with local developers on commercial projects as well, bringing in capital for new constructions like office towers or mixed-use developments. These partnerships marry local expertise with global funds, resulting in iconic projects on the skylines of Toronto and Vancouver.

It’s also worth noting that international investors see a diversification benefit in Canadian commercial real estate. The markets in Toronto and Vancouver are comparatively smaller and more stable than, say, New York or London, which can mean lower volatility. Some investors describe Canadian cities as having a “boring in a good way” market – steady rent growth, high tenant quality, and no extreme booms or busts. In uncertain times, that stability is very appealing. Case in point: during the global capital market downturn of 2022–2023, when worldwide real estate investment volume dropped sharply, Canada saw a much more modest decline in investment activity. This resilience is another reason foreign capital continues to allocate funds to Toronto and Vancouver’s commercial real estate opportunities.

Navigating Regulations and Market Outlook

In recent years, Canadian policymakers have introduced measures to cool down the housing market and address affordability, which inevitably affect international investors. Both Ontario (home to Toronto) and British Columbia (home to Vancouver) have implemented foreign buyer taxes on residential purchases – typically around 20-25% of the purchase price – aimed at deterring speculative foreign buying. Additionally, the federal government enacted a temporary ban on foreign purchases of residential properties, effective January 2023. Initially set for two years, this ban has been extended to run through January 1, 2027. This means that, for now, non-Canadians are largely prohibited from buying Canadian houses, condos, or land for residential development, with some exceptions (such as purchases of buildings with 4 or more units, or acquisitions by immigrants with certain statuses). These policies were driven by a public perception that foreign money was driving up home prices, and were intended to give local buyers an upper hand.

However, despite these regulatory headwinds, Toronto and Vancouver remain firmly on investors’ radar. For one, the ban on foreign buying is temporary – many international investors are taking a long view, anticipating re-entry into the residential market once the ban expires or if rules are eased. In the meantime, some are investing through alternative routes: using local partners or relatives who are citizens/residents to purchase on their behalf, focusing on new development projects (where exemptions may apply), or shifting capital to commercial assets not covered by the ban. The foreign buyer taxes, while adding costs, have not fully dampened enthusiasm either – they have simply made investors more selective and long-term in their approach. The fact that home prices in both cities remain high even after these measures suggests that fundamental demand (both domestic and international) still outweighs supply. In Vancouver, for example, foreign purchases dropped from over 6% of transactions in 2016 to roughly 1% in 2022 after the tax, yet prices today are higher than they were in 2016. The market adjusted without collapsing, indicating that core demand is resilient.

Looking ahead, the outlook for international investment in Toronto and Vancouver real estate is robust. The underlying drivers – economic stability, growth, livability, and population influx – are firmly in place. Global investors are attuned to these factors. As other major markets face uncertainty (be it geopolitical tension in parts of Asia and Europe or economic stagnation elsewhere), Canada stands out as a place where capital is both safe and can grow. The pent-up demand from foreign buyers constrained by current regulations could very well lead to a surge of activity once those restrictions lift. In the luxury segment, interest remains strong and will likely intensify with any future policy relaxation. On the commercial side, we can expect continued foreign investment as new opportunities arise (for example, large infrastructure projects, transit-oriented developments, and tech industry expansions in these cities). Furthermore, Canada’s commitment to immigration ensures that Toronto and Vancouver will keep expanding their talent pools and consumer bases, creating new real estate needs in the process. Savvy international investors, from individual high-net-worth buyers to sovereign wealth funds, recognize that the story of Canadian real estate is a long game – and both Toronto and Vancouver are poised to remain top destinations in that story.

In summary, Toronto and Vancouver have earned their place as global real estate hotspots through a combination of stability, prosperity, and lifestyle appeal. They offer a rare mix of safe-haven security and dynamic growth, all set in cities that rank among the best places in the world to live. For international investors, that’s an unbeatable value proposition. Even as market conditions and policies evolve, the fundamental attractiveness of these cities endures. Toronto and Vancouver remain, and will continue to remain, highly popular real estate destinations for those looking to invest internationally.