INVESTORS OWN NEARLY A THIRD OF HOMES IN MAJOR CANADIAN MARKETS
Multiple-property owners accounted for 31 per cent of all homes in Ontario as of early 2020 and almost the same share in British Columbia, a report from Statistics Canada said Tuesday. In the smaller East Coast provinces of Nova Scotia and New Brunswick, the share was about 40 per cent, the data show.
A 50 per cent rise in home prices over the last two years has made the cost of housing a political issue in Canada, prompting Prime Minister Justin Trudeau to make home affordability a centrepiece of his government’s 2022 budget.
But with the supply of houses for sale still near record lows, prices at record highs, and interest rates set to rise, the barriers for new buyers appear to be getting more entrenched. In British Columbia, the top 10 per cent of owners control 29 per cent of the total value of residential properties in the province.
Because the figures are from the period prior to the COVID-19 pandemic, they may underestimate multiple homeowners’ current role in the market. More recent data from the Bank of Canada showed multiple-property owners have increased their share of home purchases in that time, while first-time buyers represented a smaller share of the market.
With rental markets also extremely tight in Canada’s major cities, the value of these types of investors has been debated by policy-makers — they essentially turn ownership stock into rental. But while the new government report said it could not determine what impact such investment had on house prices, it did conclude there was an impact on the market.
“Owners seeking additional properties contribute to increased competition in already tight real estate markets,” the report said. This makes “it more difficult for prospective homeowners to purchase a home.”
Story by: Financial Post