CMHC Says Investors Own 17% of Toronto, Vancouver CondosKatia Dmitrieva and Andrew Mayeda
Investors have purchased 17 percent of Toronto and Vancouver condominiums, according to a survey by Canada’s housing agency.
About half of those investors rent out their last purchased unit, results published today from the Canada Mortgage & Housing Corp. poll show. Among investors, 58 percent expect to keep their most recently purchased unit more than 5 years, while 18 percent anticipate keeping it 2 to 5 years and 7.6 percent intend to retain it less than two years.
The housing agency also found 12 percent of investors bought their last unit with the intention of reselling it for profit within a year of purchase. CMHC conducted the survey of 42,426 households in August and September, and defines those who own at least one secondary condo unit as investors.
The CMHC survey sheds some light on the profile of people investing in the country’s condo market, an area that some analysts have said lacks reliable information. Policy makers have warned for the past half decade a bubble may be forming in Canadian real estate, and some analysts have said prices are as much as 20 percent overvalued.
CMHC insures mortgages against default, and its insurance is fully backed by the federal government. By law, Canadian mortgages that have less than 20 percent downpayment must be insured. The agency said 42 percent of condo investors had no mortgage on their last purchased unit.
“CMHC continues to explore opportunities to enhance the availability of information on foreign and corporate investment activities in the housing market,” CMHC chief economist Bob Dugan said in a statement.