Canadian real estate is increasingly being scooped up by investors, and incentives play a large role. That was the take in the latest report from the Canadian Housing Statistics Program (CHSP) at Statistics Canada (Stat Can). The agency’s latest numbers show that up to 85% of condo apartments in Ontario’s ten largest census metropolitan areas (CMAs) were investor-owned in 2022. More surprisingly, the CHSP attributes this boom in part to large, single corporate investors fueled by government incentives. The share owned by investors may actually rise in coming years, as even more incentives are being rolled out by various levels of government.
Investors Own Over 2 In 5 Ontario Condos, They Bought Most Of The New Supply
Ontario real estate investors are consuming an even bigger share of the condo market. They owned 43.5% of all condo apartments in the province, up 0.9 points from a year before. As high as that is, those numbers imply that 65% of new condos added in the province that year are owned by investors.
Those who assume investors target big cities are absolutely correct. Out of the ten largest CMAs, the highest concentration was in London, ON where 85.5% of condos are investor-owned. The top three are rounded out with Windsor (64.4%) and Kitchener-Cambridge-Waterloo (60.7%). It’s worth noting all three of those markets are typically considered college cities. That can be a problem with the shift in student policies.
Ontario’s Big Cities Have Seen Investors Buy Up To 85% of Condos, Fueled By Gov Incentives
Share of condo apartments owned by investors in Ontario’s ten largest census metropolitan areas (CMAs).
Source: CHSP; Better Dwelling.
Surprised Toronto has such a “low” share of investor condos, relative to other cities? Investors saw their share of the market rise 1.6 points to 38.9% in 2022. New inventory is really the issue, since the above stats reveal the equivalent of 73% of new inventory that year is investor-owned. That’s consistent with the estimate we saw earlier this year, revealing investors represent roughly 70% of condo pre-sales in the Greater Toronto Area.
Large Investors Own Whole Buildings, Fueled By Tax Incentives
The dramatic ownership shift is amplified by the rise of large, single-party purchasers. Pooling investor capital, condo buildings are either purposely developed, bought at wholesale, or acquired in a distributed manner. The group of units, sometimes a whole building, is then run as an impromptu purpose-built or distributed apartment complex. Government incentives drive this trend, according to the CHSP.
“This phenomenon emerged in part because of tax incentives that used to prevail in some Ontario cities, whereby buildings split into distinct condominium apartments could face lower municipal tax rates than rental buildings,” the CHSP explains in the report.
Adding, “As a result, developers of large apartment buildings would sometimes classify them differently for tax purposes, rather than treat them as a single rental property.”
Federal Incentives Will Attempt To Amplify The Trend Soon
More incentives will help this trend become more prevalent in the coming years. One particular example that stands out is the Government of Canada (GoC) 30-year mortgages. The plan was initially pitched as a way to help first-time buyers acquire new construction. It was quietly expanded during recent mortgage reforms to include all new construction buyers, including the investors who already purchase 70% of the supply.
Let’s say policymakers genuinely believe that low-cost, extended financing with state-assurance helps first-time buyers acquire a home. By extending it, it’s probably fair to assume the goal is to help investors grow their share of these markets.
As long as Justin Trudeau is in Ottawa there is hope. He is EXTREMELY intelligent and will turn Canada around.
Canada MUST remain strong and MUST increase temp foreign workers and international students.
House prices need to be protected and he will do what is necessary to ensure prices keep their value. As a homeowner I support him!
You heard it folks, right from the government troll farm.
Which incentives is the article referring to other than the 30 yr bond ?
I didn’t know that jokes are OK. Funny stuff, Scott.
Really hmmm
I think you need to do some more research to understand what’s really going on
As a home owner, if the government continues to protect investors and a small amount of home owners, even the home owners will lose out to the investors as well. Only corporations will own property and there will be a massive homelessness population. Too many poor hurts everyone. Rents now exceed the entire cpp or cpp-d amount. How is that sustainable?
Trying to explain what they are doing is a fools errand. The simple truth is that the Liberals are pushing every possible button to buy votes, with no thought at all for the consequences.
Keep in mind the article mentions municipalities also providing this incentive (whether intentionally or being exploited). It’s a big club of exploitation and I feel bad for the kids that are about to be crushed by it, regardless of who’s in office.
They obviously played you to say what you said. Because anyone with there right mind can clearly see trudeau let them all in fast with no screening now who know how meany crazys will bomb schools hospitals. And all for his own greed just for there votes. Where is all the $$$ they can’t find my bad that someone on his team lost. So stop with the payed posts you look silly thanks.
Agreed, but it’s not just kids. High real-estate makes high rents. Rent across the country exceeds most people’s entire cpp or cpp-d income. There is going g to be an explosion of homelessness in the next few years consisting of Canada’s most vulnerable.
The evidence clearly supports your point of view
Interesting to finally see that municipal govs are in on it too. How much of this has to do with pressure from the Fed to drum up infrastructure bank business too?
More people should be asking a lot more questions at this point.
So the “latest” report or stats we have are from 2022? LOL. And how do we trust them?
The only solution is simple though radical: total transparency and free access to provincial land registries, from parking lots to condos to farms.
Everyone should be able to download it in an excel sheet and see who owns our country.
And when politicians and developers and activist say we did this, we did that, you can download it and see what was added, who bought it, for how much, and how (cash, mortgage, load).
Latest stats are 2022 since they’re property registry data. The transfers have time to process, the municipalities have make sure they reflect any changes that aren’t reflected in the land registry, foreclosed properties need to transfer, etc..
I do wish there was more active data but if you saw the massive revisions you’d understand why Statistics Canada tries to wait for stable releases.
Canada needs immigration like the immigrsnts that came in the 1950s & 1960s
Not the types coming now why ?
Look at the countries the ones are leaving from
Those types not follow law and order look what one group did to TORONTO THE GOOD
Why would anyone spend a dime in Langley when brand new USA homes cost less than 400K? See youtube zilllow redfin and landsearch.
https://www.langleyadvancetimes.com/local-news/rate-cuts-failing-to-boost-sluggish-home-sales-in-langley-7566150
The government does not know who they let in they only know how many where let in for the votes. That’s scary it will be on the governments hands when the votes he let in blow up some schools or malls and it’s someons kids that have to pay for his votes nasty