{"id":3154,"date":"2023-09-11T02:53:04","date_gmt":"2023-09-11T06:53:04","guid":{"rendered":"https:\/\/www.teamarora.com\/?p=3154"},"modified":"2023-12-22T02:58:57","modified_gmt":"2023-12-22T07:58:57","slug":"investors-make-up-a-growing-share-of-canadas-housing-market","status":"publish","type":"post","link":"https:\/\/www.teamarora.com\/investors-make-up-a-growing-share-of-canadas-housing-market\/","title":{"rendered":"Investors Make Up a Growing Share of Canada\u2019s Housing Market"},"content":{"rendered":"
Recent data from the Bank of Canada shows that investors accounted for 30% of home purchases in Canada in the first quarter of 2023, up from 28% a year earlier[1]. This highlights the growing role of investors in Canada\u2019s housing market.<\/p>\n
Investors are defined by the central bank as buyers who take out a mortgage to purchase a property while still carrying a mortgage on another property. This signals they are purchasing the additional property as an investment rather than a primary residence[1].<\/p>\n<\/li>\n
The share of first-time home buyers shrank to 43% in early 2023, down from 48% in early 2020, indicating investors are displacing some first-time buyers[1].<\/p>\n<\/li>\n
Investors tend to prefer condominiums. They made up 41.9% of condo buyers in Ontario in early 2023[3].<\/p>\n<\/li>\n
Overall, investors own 20% of homes in Canada and 40% of condos[3]. Their share is even higher in some provinces like Nova Scotia (31.5%) [7].<\/p>\n<\/li>\n<\/ul>\n
Several factors have motivated investors to buy more properties in Canada:<\/p>\n
Strong home price appreciation during the pandemic, with prices in cities like Toronto rising over 40% from early 2020 to early 2022[6]. This attracted investors hoping to profit from further gains.<\/p>\n<\/li>\n
Low interest rates made mortgages very affordable, enabling investors to leverage their buying power[23].<\/p>\n<\/li>\n
Limited housing supply, especially in major cities like Toronto and Vancouver, presented investors with a scarce asset with high demand.<\/p>\n<\/li>\n
Strong rental demand, especially for condos, provided investors with potential income streams.<\/p>\n<\/li>\n<\/ul>\n
While investors provide needed rental housing supply, experts warn their growing presence in Canada\u2019s market is problematic:<\/p>\n
Investors tend to amplify house price cycles, overheating markets further during boom periods[7].<\/p>\n<\/li>\n
They compete directly with first-time home buyers, making affordability worse[1][7].<\/p>\n<\/li>\n
Heavy investor ownership can lead to issues like vacant homes if purchased strictly as investments[20].<\/p>\n<\/li>\n
It can shift housing from a social good towards an investment asset[15].<\/p>\n<\/li>\n<\/ul>\n
Canadian policymakers have introduced some measures to cool investor activity:<\/p>\n
The federal government banned foreign buyers from purchasing homes for two years starting in 2023[11].<\/p>\n<\/li>\n
British Columbia and Ontario have imposed special taxes on foreign buyers[20].<\/p>\n<\/li>\n
Economists argue rising interest rates may be the most effective curb on investors by eroding affordability[23].<\/p>\n<\/li>\n<\/ul>\n
The growing investor role has added complexity to Canada\u2019s housing situation. While they provide needed rental housing, policymakers are concerned investors are displacing first-time home buyers and amplifying price volatility. Their impact merits ongoing monitoring and potential policy responses.<\/p>\n
[1] Globe & Mail
\n[2] Norada Real Estate[3] Financial Post[4] Santander Trade
\n[5] RedFlagDeals[6] WOWA[7] Statistics Canada
\n[8] Bennett Jones
\n[9] Reddit[10] CREA[11] Statistics Canada[12] CNN[13] Ground News[14] PwC Canada[15] CBC[16] Le Monde[17] Knowledia
\n[18] Remax
\n[19] Nesto[20] Al Jazeera[21] BNN Bloomberg[22] RBC
\n[23] Bloomberg[24] RBC[25] Fortune<\/p>\n
Citations: Recent data from the Bank of Canada shows that investors accounted for 30% of home purchases in Canada in the first quarter of 2023, up from 28% a year earlier[1]. This highlights the growing role of investors in Canada\u2019s housing market. Key Facts About Investor Activity Investors are defined by the central bank as buyers […]<\/p>\n","protected":false},"author":2,"featured_media":3155,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[3],"tags":[],"class_list":["post-3154","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"acf":[],"yoast_head":"\n
\n[1]\u00a0https:\/\/news.ycombinator.com\/item?id=37445732<\/a>
\n[2]\u00a0https:\/\/www.noradarealestate.com\/blog\/canada-housing-market\/<\/a>
\n[3]\u00a0https:\/\/financialpost.com\/real-estate\/housing-market-investors-own-big-chunk<\/a>
\n[4]\u00a0https:\/\/santandertrade.com\/en\/portal\/establish-overseas\/canada\/foreign-investment<\/a>
\n[5]\u00a0https:\/\/forums.redflagdeals.com\/investors-account-30-per-cent-home-buying-canada-data-show-2639559\/<\/a>
\n[6]\u00a0https:\/\/wowa.ca\/reports\/canada-housing-market<\/a>
\n[7]\u00a0https:\/\/www150.statcan.gc.ca\/n1\/pub\/46-28-0001\/2023001\/article\/00002-eng.htm<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"