Hello and welcome to my newsletter where we discuss Real Estate and Mortgage insights and updates. The previous editions of the newsletter can be found as blogs on my website here.
Continuing from the last edition of this newsletter, today we’re doing a deeper dive on the profile of residential real estate investors. This one too is based on a recently released Statistics Canada report covering 5 provinces – Ontario, British Columbia, Manitoba, Nova Scotia and New Brunswick. You can read the full report here.
Overall here’s what we’ll cover today:
- Introduction
- Key Findings
- Ontario – A closer look
- Investor profile & property types
- Investor ownership patterns
- Toronto
- How to leverage this information if you’re a real estate professional
Introduction:
- There is a growing concern about the role of residential real estate investors in Canada. They can provide rental stock but also exacerbate house price volatility and limit housing market access for first-time homebuyers.
- The Canadian Housing Statistics Program (CHSP) aims to understand the role of investors by analyzing their demographic characteristics and their impact on housing markets.
Key Findings from the overall report:
- Nova Scotia, New Brunswick, and British Columbia had the highest share of out-of-province investors and non-resident investors among the provinces studied.
- The share of in-province investors owning three or more properties in the housing stock ranged from 1.6% in New Brunswick to 2.9% in Ontario.
- Established immigrants, those who landed before 2010, comprised a higher share of investors compared to their share of the provincial populations.
- Residents aged 55 and older represented a higher proportion of investors than their share of the provincial populations.
- Women represented around half of all resident investors in the five provinces but were underrepresented among in-province investors with three or more properties in the housing stock, relative to their share of the provincial populations.
A Closer Look at Ontario:
- In Ontario, the rate of out-of-province investors was relatively low, accounting for only 0.5% of all owners in the province.
- Among in-province investors, those owning three or more properties in the housing stock constituted 2.9% of all owners, indicating a relatively small segment of the market.
- Immigrant investors in Ontario had an average individual income of $80,000, suggesting a financially stable group with investment capacity.
- Notably, residents aged 55 and older represented the majority of investors in Ontario, making up 57.1% of all investors in the province.
- These findings highlight the unique characteristics of the real estate investment landscape in Ontario, with a low presence of out-of-province investors, a small but notable segment of in-province investors with multiple properties, and a significant representation of established residents aged 55 and older among investors.
Takeaways for Investors and Real Estate Professionals:
- When considering investment opportunities in Ontario, be aware of the relatively low rate of out-of-province investors, which may indicate a less competitive market in this regard.
- For those interested in the in-province investment segment, it is important to understand the dynamics of the 2.9% of owners who own three or more properties, as they form a distinct group within the market.
- Recognize the potential opportunities presented by immigrant investors in Ontario, who demonstrate a solid financial standing and contribute to the province’s real estate market.
- Lastly, real estate professionals should take note of the significant presence of residents aged 55 and older among investors in Ontario, as their preferences and needs may differ from those of other investor demographics.
Mortgage Updates – Rates & Key Upcoming events
To wrap up, here are the updates from the mortgages landscape that you should be aware of:
- Rates: Rates are still continuing with their upward trajectory. For up-to-date rate information, please always check ronmortgages.com/rates
- Prime rates: My current 5Y fixed rates start from 4.84% on the insured side while the 3Y fixed rates start from 5.19%
- Alt rates: Alternate lending rates have risen in tandem and now start at 6.14% (for a 2 yr term)
- Private mortgage rates: Starting from 8.99% (lending fees around 2%)
- Key upcoming events (that can affect interest rates in Canada):
- Bank of Canada’s upcoming rate announcement on July 12, 2023
- US Federal Reserve’s rate announcement on July 26, 2023
As always, hope this was useful. Please reach out if you or anyone you know is looking for a mortgage or a way to access equity from their current homes. Until next time.
