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Real estate investors in Canada: Who Are They?

Posted by Editor on September 10, 2023
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Statistics Canada first published investor data earlier this year. A comprehensive overview of residential real estate investors in Nova Scotia, New Brunswick, Ontario, Manitoba, and British Columbia was released in 2020 by the Canadian Housing Statistics Program (CHSP), a residential property database maintained by Statistics Canada. They have compiled a thorough list of the demographic details of investors, including their age, gender, and immigration status.

Let’s look at who is investing in Canada, where they are buying, and what types of properties they are buying in order to determine who the average investor in Canada is.

Types of Real Estate Investors

Nearly one in five homes and condos in the surveyed provinces, according to Stats Canada, are used as investments. In fact, the Bank of Canada discovered an increase in Canadian investors buying real estate in the first half of 2021. This is in line with the country’s rising interest in rental homes. The percentage of households that rent their homes has increased from 31% in 2011 to 33.5 % in 2021.

There were 918,695 houses used as investments in the five provinces. 584,615 of this total were located in Ontario. According to Stats Canada, in 2020, 79 % of Ontario homeowners did not invest, 20.2 % did, and 0.8 % were investor-occupants whose primary residence was a building with multiple units.

It is possible to further categorize investors into in-province, in-province with vacant land, out-of-province, and non-resident investors. A total of 13.6 percent of homeowners in Ontario are in-province investors, meaning they reside in the province and own two or more homes, while 1.7 percent of homeowners also own large amounts of vacant land. Out-of-province investors, or people who own homes in Ontario but reside elsewhere, make up 0.05 percent of the province’s homeowners. Non-resident investors, or people who do not currently reside in Canada, make up about 3% of homeowners. Furthermore, 11% of homeowners are companies or divisions of the government that own at least one residential property and are not non-profit organizations.

What Are They Buying?

More people chose condos as an investment choice than single-family homes, semi-detached homes, mobile homes, and row homes. With an impressive 41.9%, Ontario had the most condominiums used as investments. Investors from within the provinces owned the majority of the condos that were purchased in Ontario and Manitoba for investment purposes.

Furthermore, core municipalities in the census metropolitan areas (CMAs) of Toronto and Vancouver had higher percentages of investment properties. For instance, 21.7% of the homes in the City of Toronto were used as investment properties. The Town of Georgina, with 18.4 %, was the second-most popular location for investment in Toronto’s CMA.

 

Investor Incomes.

Out-of-province investors have the highest average income across all five provinces. The highest incomes were seen among in-province investors who owned three or more residential properties. They were closely followed by those who had one additional property in a different area, indicating that these homes were used as cottages.

An average of $120,000 was earned by out-of-province investors in Ontario. Investors in the province who owned three or more properties made an average of $110,000 and made up 20.9 %of homeowners. Those with two properties in the same region made up 6.2 % of homeowners and earned an average of $80,000, while those with two properties in different regions made up 4.4 % of investors and earned an average salary of $105,000. Homeowners who were not investors typically made $65,000 per year, compared to investor-occupants who made around $60,000.

 

Many Established Immigrants Are Investors

 

According to the CHSP, each province’s proportion of immigrant homeowners closely matches the proportion of immigrants living there. This implies that immigrants have the same access to homeownership as their counterparts who were born in Canada.

Furthermore, established immigrants made up a larger proportion of investors in the provinces under study than they did of the total population. Immigrants, including both recent arrivals and long-term residents, were overrepresented among investors in both Ontario and British Columbia compared to their respective proportions within the provincial population. In Ontario, investors made up 33.2% of the total population, while homeowners who were not investors made up 32.2%. The province’s population, however, only comprised 30% immigrants.

 

Furthermore, immigrants in Ontario, Manitoba, and British Columbia had lower average incomes than investors who were Canadian-born. British Columbia and Ontario are where this is most noticeable. Canadian investors reported an average annual income of $105,000 in British Columbia. However, immigrant investors had an average wealth of $80,00. In a similar vein, investors who were born outside of Canada typically earned $100,000 on average, compared to $80,000 for immigrants in Ontario.

 

However, compared to Canadian-born investors, the property of immigrants tended to be more valuable. For instance, in Ontario, immigrant investors’ average property holdings were $1,290,000, compared to $890,000 for investors who were born in Canada. This is possibly influenced by the propensity of immigrants to purchase their primary residence in a sizable census-designated place with high property values.

 

Most Investors Are 55+

 

In comparison to their share of the population, homeowners aged 55 and older were found to be overrepresented. This can be attributed to the fact that buying a home frequently necessitates significant savings and a higher income typically associated with longer work experience. Despite making up a minority of the adult population in each province, this age group is even more overrepresented among investors for these reasons.

 

However, compared to their proportion of the adult population, Canadians under the age of 35 were noticeably underrepresented among homeowners. Even more so among investors was this underrepresentation. Younger generations have fewer years to earn an income, which makes it harder for them to save the money necessary for homeownership and, to a greater extent, real estate investment.

 

Only 51% of investors in Ontario were under the age of 35, compared to 57.1% of investors who were 55 and older, 37.8%, and 5.1% who were between the ages of 35 and 54.

Gender Distribution Among Investors Is Balanced

 

In each of the five provinces, a comparable percentage of investors were men and women. Male investors made up 50.2% of resident investors in British Columbia and 56.2% in New Brunswick. This suggests that there aren’t many differences in real estate investing skills between the sexes. Men were disproportionately represented among investors with three or more properties in their portfolios, it is important to note. In addition, female investors typically made less money than male investors. In Ontario, male investors made an average of $115,000, compared to female investors’ $75,000 income.

Nevertheless, in the provinces surveyed, men and women had real estate holdings with comparable average assessed values.

 

Why Not Invest Today? What Are You Waiting For?

 

A real estate investor can be anyone, according to statistics from Stat Canada. You can join the millions of Canadians who are investing in housing by working hard and saving, regardless of your income, gender, or immigration status.

This is especially true if you are in your forties or fifties and want to create a bright future for yourself and your family. Join your peers in buying a secure, tangible asset to help you prepare for retirement and any financial challenges that may come your way.

 

If having enough money to live comfortably is a barrier for you, you can become an investor-occupant by renting out a portion of your home, as many Canadians have done. This can be easily achieved by buying a property with more than one unit or renovating your home to have separate entrances and kitchens. It’s also possible to rent out a space in your house. Additionally, you have the option to invest in the pre-construction market, where the best offers on brand-new homes are ensured.

Our Platinum Agents can help you find your ideal suite and guide you through the purchasing process if you want to join the thousands of Ontarians who have invested in condo units. To find out more about the real estate market in the Greater Toronto Area and how you can join the millions of people who are growing their wealth, click here.

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