It’s the million-dollar question. Or maybe, as National Bank economist Peter Routledge suggests, it’s a multi-billion-dollar question.

Just how active are foreign investors in the blistering Toronto and Vancouver housing markets?

Last year, home buyers from China spent $12.7 billion on residential real estate in Vancouver, or 33 per cent of overall sales volume, and $9 billion in Toronto’s market, or 14% of the total invested in real estate there, according to Routledge’s estimates.

Citing a lack of Canadian data, Routledge used US numbers from the stateside National Association of Realtors (NAR) alongside a Financial Times survey to get a sense of what foreign investment levels north of the border might look like.

For the National Bank estimate, Routledge zeroed in on Chinese investors “since anecdotal evidence suggests that the capital inflows most prominently influencing Toronto and Vancouver housing valuations come from mainland China.”

According to NAR’s latest annual Profile of International Home Buying Activity, which includes its own estimates on how much foreign investors are spending in the US residential real estate market, Chinese investment in housing there totalled $28.6 billion in US funds in the year ending in March 2015.

Routledge came to the obvious conclusion that investment in Canada’s two hottest market must be a proportion of this. “The question is : what proportion,” he writes.

To better gauge this, he then looked at an August 2015 Financial Times survey of 77 high-net-worth and affluent individuals from China — “Not a statistically significant sample size,” Routledge admits — which found that of those who bought a house abroad, 33.5% did so in the US, compared to 11.7% and 8.3% in Vancouver and Toronto, respectively.

“From this survey data, one could hypothesize that for every four high net worth investors from China who purchase a US residence, one purchases a residence in Toronto; and for every three high net worth investors from China who purchase a US residence, one purchases a residence in Vancouver.”

When these ratios are applied to the total volume of Chinese investment in US real estate according to NAR, Routledge comes up with his estimates for these Canadian markets.

The numbers may appear at odds with figures from the Canada Mortgage and Housing Corporation on foreign condo ownership. According to its 2015 Condominium Apartment Vacancy Survey, 5.8% of condo units in Toronto are foreign-owned, compared to 5.4% in Vancouver. However, Routledge wasn’t caught off guard.

“In a society as compelling and open to immigration as Canada is, it is not surprising to us that flows of immigrants and foreign capital into the country’s two magnet cities — Toronto and Vancouver — influence the local prices of homes,” writes Routledge, listing the country’s multiculturalism, education and healthcare systems, and fluid citizenship process among its draws.

Routledge also has an idea of what may account for the lack of comprehensive data on foreign property ownership in Canada.

“Addressing the influence of this capital flow on local residential real estate valuations can inflame unproductive tensions,” he writes. “The prospect of unduly exacerbating these tensions may cause some to recoil from studying the issue — a reaction that, though honest and understandable, we see as unproductive.”

Routledge continued: “Surely one can study the issue of immigration, foreign capital flows, and housing affordability in a manner consistent with the country’s guiding principles regarding immigration and multiculturalism.”

In November 2015, Andy Yan, an urban planner and former roundtable member of the mayor’s housing affordability task force in Vancouver, unintentionally stirred up controversy when he released a report looking into possible foreign ownership numbers in three Vancouver neighbourhoods.

Critics at the time said the report was racist. Yan used non-anglicized Chinese names as an indicator of foreign ownership.

While the federal budget for 2016-2017 shows $500,000 being set aside for Statistics Canada to drill down into the issue further, which Routledge points out is a little over a quarter of the average price of a Vancouver detached home, or “a touch on the low side,” it will be some time before the agency has anything new to show.

So for now, Routledge’s handiwork might provide as good an idea of foreign investment in Canadian real estate as anything else out there.

This Economist Calculated How Much Chinese Investors May Be Spending on Toronto & Vancouver Real Estate by Josh Sherman | Buzz Buzz Home