StoryLine By CondoNow
As most followers already know, the Canada Mortgage and Housing Corporation released a report last week focusing on condominium ownership in Canada’s two largest markets, Toronto and Vancouver.
In their own words, this report sought to gather data that sheds light on the extent of domestic household investor activity and on the profile and purchasing motivations.
In the simplest terms, the CMHC wanted to find out the number of condo owners that were investors versus the number of condo owners that actually lived in their units.
The big claim coming out of the report, which surveyed over 42,000 households, was that 82.9% of those who own at least one condominium live in their units. This means, according to the CMHC, only 17.1% of condo owners in Vancouver and Toronto are identified as investors.
As Sue Pigg puts it in her article in The Toronto Star, “The survey released Friday quickly came under criticism by some housing watchers, especially in Toronto where investors are generally believed to control far more — at least 40 per cent — of the new condo market.”
Pigg shrewdly points out that the CMHC survey excluded foreign investors; it excluded those who own condos in Toronto and Vancouver but who do not live in either of those cities; and it excluded condos purchased in the last five to seven years where the purchaser bought into developments that have not yet begun construction or are mid-build. In short, a survey conceived to determine the number of condo investors in Toronto and Vancouver excluded three, very large and important pools of investors from its methodology.
A quick search of ongoing Condo VIP Sales and Condos Coming Soon on CondoNow.com reveals 53 developments launching or set to launch in the GTA alone. This fall is shaping up to be one of the busiest since the market’s peak in 2007. At CondoNow we work with developers every day and can comfortably estimate, with the caveat that investor interest varies by location and project, investors generally make up between 50% and 60% of all sales.
Urbanation reports on rentals
On the heels of the CMHC survey, Urbanation released its own findings late last week related to rental rates in the GTA. They found, despite a surge of new supply, rental rates remained steady. In other words, demand for rentals in Toronto matched the inventory available. Had it not, the price per month would start dropping.
Urbanation: “The number of condos for rent on MLS grew by 26 per cent in the quarter, year over year, to a record 6,708 units. But the growth of new investor-owned condos on the market outpaced that, climbing 29 per cent year over year by 29 per cent.”
