More than 10% of hot-market homeowners own more than one home

  7/29/2021 |   SHARE
Posted in Canadian Housing Market by Catherine Methven | Back to Main Blog Page

Home Purchase Contract

Canny Canadian homeowners are using the build-up of equity in their primary residence to invest in other homes.

In three large and hot urban housing markets – Greater Vancouver Area (GVA), Greater Toronto Area (GTA), and Greater Montreal Area (GMA) - more than 1 in 10 homeowners owns more than one property according to a new survey by Royal LePage.

Many of these investors are bringing in rental income from their secondary homes – around two thirds of those in the GVA and GTA are although this falls to little more than one third in the GMA.

These owners may not be full-time landlords though as many use the properties themselves at least some of the time. In the GVA and GTA around half of respondents said their secondary properties are solely rentals compared to just 25% in the GMA.

"Among secondary property owners in Montreal, the majority are using the properties for leisure, like recreational purposes, rather than as an investment," said Roseline Guèvremont, real estate broker, Royal LePage Tendance.

While just 21% of Montreal buyers have tapped equity in their primary residence to finance their investments, this rises to 42% of owners in the GVA and GTA.

"In Montreal, although the real estate market has begun to catch up [with the GVA and GTA] in recent years, prices remain considerably more affordable, so buyers can purchase without necessarily leveraging equity from a primary residence," explained Guèvremont.

Young owners invest

Ownership of multiple properties in the hot urban housing markets is a significant investment strategy of many young Canadians.

The survey shows that among homeowners aged 18-35, the share that owns more than one property is 18% in the GTA, 16% in the GMA, and 14% in the GVA.

For over 35s, multiple ownership is highest in the GVA (14%) with 11% in the GTA and GMA.

"Young buyers are looking to capitalize on the real estate market by investing in a property that will appreciate over time. I have many younger clients who have purchased condos or smaller homes for as little as $300,000 outside of Toronto, in areas like Guelph and London, where the rental market is very active among students," said Karen Millar, sales representative, Royal LePage Signature Realty. "Parents of students in Ontario's university towns are also taking advantage of the local rental market, purchasing a property - often times with multiple units - for their children to stay in while studying and also as a source of rental income from other students."

Important role

Although some may criticize those that buy multiple homes in the tightest markets, Royal LePage CEO Phil Soper says these investors play an important role in Canada’s housing requirements.

"Entrepreneurial landlords supply housing to the 30% of Canadians who rent, be they new immigrants, students, young people entering the labour force, or those who cannot or choose not to own their home," he said.

Source: WP



GTA, Home Owners, Home Ownership, Investments, Real Estate Investments, Real Estate Investors



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