More Canadians Are Investing in Real Estate Than Ever Before According to New Exciting Data in 2023
Homeownership has long been a mark of success and maturity for Canadians. Just owning one home is a financial accomplishment, and for most will be the biggest investment of their lives. But what do we know about the Canadians who own two homes—or more?
To answer this question, Statistics Canada conducted a study aimed at a better understanding of multi-property owners. Their research focused on a subset of multi-property owners whose primary residence is in British Columbia, Ontario or Nova Scotia. The subset did not include property owners from other provinces, non-residents of Canada or non-individual property owners.
These real estate investors are mostly landlords and in some cases flippers - all individuals who are investing in real estate. However, the information available to Stat Can doesn’t confirm how the second properties are used. They made informed guesses based on proximity; for example, someone likely isn’t buying a vacation home in the same neighbourhood as their primary residence.
Not all multi-property owners might consider themselves real estate investors, but these insights are important for understanding how and which Canadians are buying multiple properties. The numbers also demonstrate the growing popularity of investing in real estate among Canadians.
So, before we dive into the data, if you are interested in the idea of investing in real estate, click the link below for a free strategy call with our team at LendCity today to discuss financing options today.
Most multi-property owners live in big cities
An overwhelming number of Canadians who are investing in real estate live in Toronto, Ontario and Vancouver. Ontario boasts 835,175 residents who own multiple properties. Toronto is home to 359,475 multi-property owners. The distribution and concentration of multi-property owners in each province tended to reflect the province’s overall population patterns.
Not surprisingly, the multi-property owners with the highest-value holdings are also concentrated in Toronto and Vancouver. In Ontario, 86 percent of multi-property owners whose holdings are valued at more than $10 million lived in the Toronto area. That’s in contrast to the 43 percent of all multi-property owners in the province who live in the Toronto metro. Similarly, 78 percent of British Columbia’s multi-property owners whose holdings are valued at more than $10 million lived in the Vancouver area, compared to the 53 percent of all multi-property owners living in the city.
Multi-property owners look like single-property owners
Any property owner—single or multiple—is generally older than non-property owners. However, there isn’t a significant age difference among people who own only one property or multiple properties. For example, the average age of a multi-property owner in Ontario is 56, while the average age of a single-property owner is 54.
Gender does not seem to factor into multi-property ownership. Residential and multi-property ownership tends to be even among men and women.
Single-detached homes are most common among these investors
Single-detached homes are the most common choice both for a primary residence and for a second property. Most multi-property owners own two single-detached homes. Less than 30 percent of property owners in British Columbia, Ontario and Nova Scotia own three or more properties.
In each province’s largest metropolitan area, the most common type of property mix was owning two single-detached homes. Less common mixes included owning a single-detached home and a condominium, two condominiums or a single-detached home and vacant land. In Halifax, nearly 25 percent of multi-property landowners own a single-detached home and vacant land, which was a much less popular option than in the other metro areas. Nova Scotia has more vacant land for sale and Halifax has fewer condominiums, accounting for the difference.
As for their primary residence, the multi-property owners’ choices varied by city. In Halifax multi-property owners overwhelmingly reside in single-detached homes (91 percent). Vancouver has more diversity with more residents opting for condominiums, townhomes or apartments, but a majority still prefer single-detached homes.
These primary residences tend to have higher valuations than the homes single-property owners occupy. The more properties a person owns, the higher the valuation on that person’s primary residence. This distinction is sharp in Vancouver: the average cost of a single-property owner’s home is $936,000, while the average cost of the primary home for someone who owns two properties is $1,220,000. That number rises to $1,570,000 when a person owns four or more properties. In Halifax, that trend is much less pronounced: single-property owners' average home value of $245,000 and two-property owners have a primary residence valued at $261,000.
Roughly half of the multi-property owners in Toronto and Vancouver live in the same census subdivision as their other property. Though the study was unable to confirm the purpose of the second property, these are likely rentals.
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What does this mean for people who are investing in real estate already?
Single-detached homes have long been a hot commodity, but many have called into question their affordability. Investing in a moderately priced single-detached home—either to rent or flip—can be a better investment than a luxury townhome.
New single-detached homes are not being built in the same numbers as in previous years. Many real estate investors still consider single-detached homes to be their ideal purchase were it not for the price. Demand seems to be declining some, making their prices more affordable for the first time in years.
Meanwhile, condominiums are much more popular in new construction. There has been significantly more condo building than a single-detached or rental building. Condos play a large role in Canada’s rental market, with many investors opting to purchase a condo. Still, investors in Toronto have been wary after watching many condo projects fail to materialize, while investors in places like Halifax don’t need the alternative condos to provide because single-detached homes are relatively affordable.
Investing in real estate doesn’t happen in a bubble. Many forces impact the property you buy, what you do with it and how successful you are. You can become a better real estate investor by learning more about the region(s) where you buy and what the current market trends are. With many more Canadians joining you in the world of investing in real estate, it’s important to keep up with the latest developments. Knowing your market and the trends of that market will help you become a more informed investor, making decisions ahead of the curve instead of behind it.
Now, if you are ready to start investing in real estate - or you are already investing in real estate and want to continue your journey - click the link below for a free strategy call to discuss financing options, mortgage structuring and more.