The Canada Mortgage and Housing Corporation (CMHC) has found that 53.9 per cent of Toronto and Vancouver residents that bought a secondary condo unit in 2014 made the purchase for generating rental income. The Condominium Survey (COS) survey, now in its second year, aims to shed light on the buying habits and intentions of condo purchasers in Canada’s most vertical cities.
COS investors are defined as condo owners who have a secondary suite in a addition to the home they live in. Among Toronto and Vancouver residents that own at least one condo, 83.8 per cent reside in the suite while 16.2 per cent own their primary home and own at least one secondary condo unit.
However, the survey doesn’t take into account foreign investors, corporate investors and Canadians that own units in either of the two cities, but don’t live in the same metro area as their investment. It also excludes people who rent their primary residence and own a secondary condo unit.
The survey found a number of differences between owners (those without a secondary suite) and investors. The same can be said for Vancouver and Toronto condo buyers.
About 45.4 of owners have had their condos for ten years or more while just 23.7 of investors have had their suite for a decade or more. However, investors don’t appear too interested in offloading their suites anytime soon.
“Our results show that most COS investors are in the market for the long term and expect to keep their last purchased secondary unit for more than five years,” said Robyn Adamache, CMHC Principal Market Analyst for Vancouver. “Many have had their last unit for six years or longer.”
Interestingly, investors typically had a larger downpayment with 45.3 per cent putting down more than 20 per cent. Just 31 per owners did so, which makes a certain amount of sense if so many are holding onto their condo for more than 10 years.
Owners also appeared more optimistic than investors with 59.8 per cent anticipating a boost in the value of their unit over the next year, compared to 55 per cent of investors.
It’s also where Toronto and Vancouver buyers diverge with 64 per cent of Toronto investors expecting an increase in the valuation of their secondary unit over the next year, compared to 41.5 in Vancouver. The amount of Toronto investors anticipating a rise in value also increased compared to the 2013 survey when 56.1 per cent of respondents believed in a boost on the horizon.
Toronto investors also seem more comfortable buying before the condo has materialized with 42.3 per cent buying during the pre-sale or construction phase compared to just 26.4 in per cent in Vancouver.
The survey is based on the answers of 42,191 households.