Photo: François Péladeau/Flickr
Once again, the Canada Mortgage and Housing Corporation (CMHC) is trying to shed light on the mysterious condo owner. We know that, as of 2011, there were 1,615,000 occupied condos across the country, but who’s buying and how long do they plan on staying?
Much of the angst surrounding the rapid proliferation of condos in big cities boils down to concerns over investors and oversupply – whether the condos that are being bought up and rented out will flood the resale market in the event of any economic hiccups.
In 2013, the CMHC surveyed 42,426 households which owned their primary residence in the Toronto and Vancouver CMAs and owned a condo. The result? The survey found 82.9 per cent of condo owning households in Vancouver and Toronto live in their unit while 17.1 per cent are investors.
While the survey covered condo owners who use the unit as their primary home, the main thrust of the report focused on “condo investors.” The investor designation is meant for households who had a secondary suite, regardless of whether they primarily lived in a freehold dwelling or a condo. The survey excluded households who rent their primary residence, but own an additional condo that they rent out.
However, it should be noted that the survey didn’t cover Canadian households that own condo units in Toronto or Vancouver, but reside elsewhere. Foreign and corporate investors also weren’t included in the results, an issue that could have a significant impact on the numbers, especially in Vancouver.
Here’s what the survey found about Vancouver and Toronto condo investors:
- About half of investors are renting out their last purchased unit; 36.8 per cent occupied the suite or had family living there; 6.9 per cent indicated that their last purchased unit was vacant (it was either for sale, for rent or for other reasons such as renovations at the time of the survey).
- 42.1 per cent of investor households surveyed had no mortgage on their last purchased condo.
- Three quarter of investors owned one condo, while 15.7 per cent owned two units and 9.8 per cent owned three or more.
- 25.7 per cent of the investors surveyed bought at least one unit in the presale or pre-construction phase; 30.2 of Toronto investors bought presale compared to just 19.5 of Vancouver investors.
Length of ownership
- 58.4 per cent of investors expect to keep their last purchased suite for more than five years.
- 17.9 per cent believe they’ll hold onto their suite for two to five years, while 7.6 per cent expect to keep it for under two years.
- 11.9 per cent said they bought their last secondary condominium unit with the intention of reselling it for a profit within a year of purchase.
- 16.1 per cent weren’t sure.
- 53.2 per cent of investors in Toronto and Vancouver bought their last secondary unit for rental income while 11.9 per cent intended on reselling the suite for profit within a year.
- 47.9 per cent expected the value of their last purchase increase over the next year; 42.2 per cent expected the value to remain stable and 5.4 per cent expected the value to decrease.
- Toronto investors were more optimistic, with 56.1 expecting the value of their investment to increase over the next year, compared to just 36.6 in Vancouver.
To learn more, the full report can be found here.