More home buyers are seeking investment properties in Ontario, according to new government data that show for the first time the extent of investor ownership in the housing market.
The number of non-owner occupied properties increased by 34,915 in the 12 months to January, 2020, according to a report from Canadian Housing Statistics Program, which analyzed property assessments, land registry data and tax filings.
“When a property is not owner occupied, in the cities in particular, then these are most likely rented out or vacant,” said Jean-Philippe Deschamps-Laporte, head of the CHSP. “When it is more rural, it is potentially used for recreational purposes.”
In Ontario, non-owner occupied properties made up 23.2 per cent of all owned residential properties in early 2020 versus 22.7 per cent in the previous year. Condos appeared to be the most popular with investors, with 44 per cent not occupied by their owners.
Some areas with the highest percentage of non-owner occupied condos were in cities with major universities, such as London, Kitchener-Waterloo and Kingston.
In Toronto, the country’s major employment hub, 38 per cent of condos are not occupied by owners. In Barrie, a city north of Toronto where home prices have risen quickly, the percentage of non-owner occupied condos was just over 40 per cent.
Higher real estate prices and rental rates have worsened the country’s affordable housing problem and put pressure on all levels of government to make it easier for residents to secure housing.
The federal government has introduced a 1-per-cent tax on foreign-owned property that it deems vacant. The tax will be on the value of the residential real estate.
However, it is unclear whether the new tax would be enough to spur homeowners to rent their properties or sell them. As well, the CHSP report shows that more than 90 per cent of the non-owner occupied properties in Ontario were owned by Canadian residents, as opposed to foreigners.
In the lead-up to Monday’s federal election, the three major parties have proposed making it harder for foreigners to buy residential real estate, either through temporary bans or higher taxes.
The CHSP report shows that the percentage of foreign-owned property remained steady from 2019 to 2020 with the highest share in the Vancouver region.
The area close to the University of British Columbia topped the list with 17 per cent of condos owned by foreigners, followed by 7 per cent of condos in Richmond, B.C., and 7 per cent of condos in Toronto.
As the report is based on data from early 2020, it does not reflect the impact of the pandemic’s real estate boom, where residents vacated condos in urban cores for larger properties with green space in smaller cities and cottage country.
CHSP was established by Statistics Canada after the 2016-17 housing boom to help provide insight on buyers and the housing market.
Although the CHSP has provided key information on foreign buying and investors, the data are not often comprehensive as the program depends on co-operation from private entities and the provinces.
With a file from David Milstead
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