New data released by the Canadian Housing Statistics Program show that one in five City of Vancouver property owners own more than one property, with similar levels in Toronto. The report suggests that homeowners who own more than one home – in some cases, three or four, or more – is a growing group and is concentrated in Vancouver and Toronto.
Twenty per cent of homeowners in the City of Vancouver own more than one property. For the wider Census Metropolitan Area, the figure is 16.4 per cent – a number matched in the Toronto CMA.
In the City of Toronto, 17 per cent of homeowners own two or more properties.
In Metro Vancouver, multiple homeowners (MHOs) are most concentrated in the Village of Anmore (north of Port Moody), with 31.8 per cent owning more than one property. In West Vancouver, 27.2 per cent of homeowners belong to the MHO club, as do 27.2 per cent in Lions Bay. One in four homeowners in Belcarra belong to the club.
A report done in 2018 by the CHSP showed that 268,670 homeowners in B.C. owned two or more properties. Of those, 62,570 owned three or more properties.
At 57, the median age of the multiple homeowner is only a couple of years older than the median age of a single property owner. The majority of those MHOs live in detached houses, and their second property is also most often a detached house. As well, nearly half own properties that are located within the census metropolitan area in which they live. That indicates that these investment properties are more likely to be used as rental rather than recreational properties, which are typically located well outside the area of the principal residence. However, they could also be empty, or used for something else. That part of the picture is unclear.
The CHSP, part of Statistics Canada, relies in part on tax information provided by the Canada Revenue Agency; so once tax returns are completed for 2020, the CHSP will begin analyzing data for the pandemic year. The data used here was obtained in 2018 and 2019, the most recent available.
“Because of the magnitude and the depth of the data, it is really an example of how we are building this program, every time we add a new component,” said Jean-Philippe Deschamps-Laporte, chief of the CHSP in Ottawa. “It’s like if you do a number painting and add a little colour based on that one number, and then slowly you build something that I myself might find beautiful. If you think about it, owning a home represents Canadians’ most important asset. It also represents Canadians’ most important debt at the household level. So due to the sheer importance of the domain, we have to develop all the facets of that domain.”
The data also show that the more expensive your principal home, the more likely you are to own multiple properties. In Vancouver, the owner of just one property lives in a house with a median assessment of $936,000. The owner of two properties lives in a house assessed at $1.220-million. The owner of three properties lives in a house valued at $1.410-million, and the owner of four properties resides in a house with a median assessment of $1.570-million.
The data is valuable because it will inform policy, says Andy Yan, director of the city program at Simon Fraser University. He said it brings into question “filter theory,” which says that the more supply built, the more opportunities for lower income people to move onto the property ladder. The theory doesn’t account for property hoarding, which might have been driving the market in the past year.
“This latest rush in Canadian residential real estate, is it young people buying their first homes like what happened after the Second World War? Or is this a speculator class adding a second or third property to their hoard?”
Mr. Yan prepared several charts based on the CHSP data, including metropolitan Toronto. In that region, King topped the list of highest concentration of multiple property owners at 26.2 per cent.
“While some Canadians are struggling to find and secure any shelter, there are others who have the opulence of second, third or even fourth homes. How many homes can you occupy at once?” Mr. Yan said.
Urban Planning Professor David Hulchanski at the University of Toronto says that in academic circles, the phenomenon of multiple home ownership is not new but it is growing and changing. The old landlords of yesteryear might have run rooming houses as a revenue stream. Today, the options for revenue include short-term rental, or the property might serve for other family members, or they might just be “safety deposit boxes” in which to store cash. The correlation between wealthier municipalities and the prevalence of multiple home ownership points to the role that housing plays in wealth creation.
“[Multiple home ownership] is much more prevalent now, and much more diverse in a variety of ways, the reasons for it, and the implications for it,” Prof. Hulchanski says.
“This came about in the 1980s and the 1990s when income inequality and wealth inequality took off quite dramatically. We have in our cities, so many people with not only good incomes and incomes protected even during a pandemic, as mine is, as a professor, but enormous wealth. So what do you do with it?
“There are just so many people doing so well. It’s not just income inequality; it’s the polarization. There are more at the top and more at the bottom, at the expense of the middle. The middle is much smaller now than 20 years ago, the middle-income group. But there are way more at the top, and they don’t know what to do with their money.
“Where else do you make the returns that we see in these hot housing markets?”
Prof. Hulchanski referred to a 2020 paper released by the International Journal of Housing Policy on the topic of increased multiple property ownership by individuals and households, which is on the rise in several countries. There has been much discussion around increased private rental growth through investment firms acquiring rental buildings as long-term assets. However, we are also seeing a concentration of rental properties at the household level, says the paper, whose academic authors are from Vienna, Amsterdam and The Hague.
“While high house prices exclude a growing group from access to decent and affordable housing, the number of households that own more than one property – and thus become multiple property owners – is also on the rise.”
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