Ontario shows an increase in investment properties purchases

Homebuyers are becoming more interested in Ontario investment properties.

The recent report by Canadian Housing Statistics Program (CHSP) shows that more and more homebuyers are looking for real estate in Ontario, not planning to occupy it.

Over a 12 months period which ended in January 2020, the number of non-owner occupied investment homes rose by 34,915 units. At the beginning of the previous year, non-owner properties accounted for 23.2% of all owned residential properties, while it was 22.7% a year earlier. Ontario condo units were the most popular housing type for investors, with 44% of them being occupied not by their owners.

The highest share of non-owner occupied condos was reported in the cities with large universities, e.g. Kingston, London, and Kitchener-Waterloo. In case of Toronto, the number reached 38%, and the red-hot Barrie region showed 40%.

As housing affordability was one of the key issues during the recent election campaigns, investment properties have attracted a lot of attention. Three main parties have promised to reduce foreign investment in Canadian real estate.

Nevertheless, according to the CHSP report, more than 90% of non-owner occupied properties in Ontario were owned by Canadian residents. Only 7% of all condo units in Toronto are owned by foreigners.

At the same time, the CHSP data shows results from the start of 2020, so it doesn’t include the sharp housing activity hike caused by the pandemic. The cost of rent was down significantly in cities like Toronto, that’s why buying an investment condo here became less attractive. However, according to the last research from Urbanation, rent has almost recovered to pre-pandemic levels and investors are back on the market, snapping small studios in the city core and all over GTA.