What Does the Typical Condo Investor Look Like Anyway?

HomeHappy • April 7, 2017

If you have ever listened to the media discuss the housing market in Vancouver, you will have no doubt heard many theories on what’s driving the market to unimaginable new heights every time new market stats are released.

Among those theories is that condo developers are overdeveloping and that property investors are buying multiple units at a time hoping to make a quick buck by flipping them, driving prices up.

Well… according to a new study done by the Canadian Mortgage and Housing Corporation (CMHC) actually quite the opposite appears true. CMHC actually went as far as to subtitle their study “Latest CMHC Report Shows Condominium Investors Are in It for the Long Haul”… I guess we can cross quick profit condo investors off the list of potential culprits fuelling the Vancouver housing market fire.

Here is a copy of the official news release by CMHC and the report in it’s entirety.

OTTAWA, April 5, 2016 — Condominium investors in Vancouver and Toronto display stable characteristics over time. Most are small-scale investors that own only one secondary unit, nearly one-half purchased their last secondary unit for rental income and most expect to own their investment property for more than five years, according to Canada Mortgage and Housing Corporation (CMHC) 2015 Condominium Owners Survey (COS) released today.

The annual report, focused on the Vancouver and Toronto Census Metropolitan Areas (CMAs), includes survey insights on what motivates condo purchases, how long owners hold onto their units, and the mortgage-financing profile of condominium owners whose primary dwelling is a freehold or condominium unit but who also own at least one secondary condominium unit. These households are referred to in the report as COS investors.

Report Highlights

  • Results are very stable over surveys.
  • Nearly one-half of COS investors purchased their last secondary unit for rental income.
  • About 60% plan to hold onto their last purchases unit for more than 5 years versus 8% planning to sell their unit in less than 2 years.
  • Nearly three quarters have only one unit and roughly 90% do not plan on buying new units in year following the survey.
  • 56% expect their units to appreciate, 35% do not expect a significant change and 5% anticipate a decrease in value.
  • The share of COS investors with a mortgage on their last purchased unit (at the time of the survey) stood at 53 per cent. This is slightly below the share reported for all home owners (59 per cent) in Statistics Canada’s 2011 National Household Survey.
  • The surveys of Toronto and Vancouver produced similar results. However, a larger share of respondents in Toronto expect the value of their units to increase than in Vancouver, but the gap is closing.

COS investors, as defined by CMHC, exclude households that own only one condominium unit in which they reside, as well as households that own a secondary unit but rent their primary residence.

The complete COS report is available here.

In order to access future Market Analysis Centre publications from CMHC, please subscribe to Housing Observer Online by visiting the following link: https://www.cmhc-schl.gc.ca/observer/

As Canada’s authority on housing, CMHC contributes to the stability of the housing market and financial system, provides support for Canadians in housing need, and offers objective housing research and information to Canadian governments, consumers and the housing industry.

Condo Owners Report CMHC April 2016


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