An effort to get more information about the influence of some speculators in Toronto’s condo market has collapsed after developers refused to take part, leaving policy makers in the dark.
Urbanation Inc., a data-research firm, has pulled the plug on a survey that it had tried to conduct, with the support of Canada Mortgage and Housing Corp., to quantify how many “assignments” are taking place in the market.
An assignment is when a buyer who has bought a condo in a building that’s not yet finished, or registered, assigns their right to buy the unit to someone else.
Urbanation officially called off the study Tuesday, after the vast majority of developers who were asked for information did not give it. The study could have shed light on an aspect of the condo market that economists and policy makers have been worried about, as they have sought to get a handle on just how overheated the market might be and what risks it might pose to home buyers and the greater economy.
“There aren’t any good numbers on the amount of properties being used for investment purposes,” said Toronto-Dominion Bank chief economist Craig Alexander. “It’s very hard to assess risk in the market when you don’t have insight on that.”
Urbanation had sent a letter to developers in August, notifying them that it would be conducting this “very important data collection exercise” with the support of CMHC.
Ben Myers, executive vice-president at Urbanation, said he sent the survey to more than 100 developers that had launched condo projects in the past five years, asking them for either the percentage of units or an exact number of units that had been assigned before the condo buildings were registered. “We wanted to know what’s happening with this shadow market; there’s no real way to track it,” he said.
He said that one person he spoke to, outside of the developer community, speculated that “because some of the people assigning units are not paying capital gains taxes on that, developers may not want the government looking into that any further.”
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