CMHC crunches condo ownership breakdown

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Brokers and industry professionals have often wondered what percentage of condos in Canada’s two biggest markets are owned by investors and the data has finally been compiled.

“As information on condominium investment is rather limited at this time, CMHC has gathered new data on a segment of domestic condominium investment activity in Toronto and Vancouver,” Bob Dugan, chief economist at CMHC’s Market Analysis Centre said in an official release. “While the results are not representative of other markets or all types of investors, the survey helps to shed some light on the profile and purchasing motivations of a segment of condominium investors in Toronto and Vancouver.”

According to CMHC, 82.9 per cent of condominium owners reside in their unit while 17.1 per cent are owned by condo investors.

The survey also found that “about half” of condo investors in Toronto and Vancouver currently rent out their last purchased unit.

However, one glaring omission from the survey are foreign investors, as it only included condo owners who reside inside their CMAs.

“CMHC continues to explore opportunities to enhance the availability of information on foreign and corporate investment activities in the housing market,” Dugan said.

The survey also found that:
  • 58.4% expect to keep their last purchased unit for more than 5 years;
  • 17.9 % for 2 to 5 years;
  • 7.6% for less than two years, and 16.1% did not know or answer;
  • 11.9% of respondents said they bought their last secondary condominium unit with the intention of reselling it for a profit within a year of purchase.
  • gar on 2014-08-12 11:21:50 AM

    This market is about to collapse in Vancouver and Toronto . Condo fees have become far more than the financiers can feel safe about. Added to a mortgage they will take many buyers out of the market who will look for rentals that they can feel comfortable with in a market that is heading south.

  • Janet on 2014-08-12 11:45:24 AM

    Where is the report and how many units is that or how many total units?

  • comomark on 2014-08-12 12:21:18 PM

    There is a healthy market in rentals - low vacancy so -- what is the problem?

  • Bill on 2014-08-12 1:02:55 PM

    @gar
    "This market is about to collapse..."

    Been hearing that for 20 years. Not much of an economist, are you?

  • rentmycondo on 2014-08-12 1:06:24 PM

    Now, if the condos were in Hawaii, we would have the Investors at 82.9%. For short term vacationers, condos could be a good deal anywhere. But who wants to live in Toronto for a month on vacation?

  • David on 2014-08-12 3:29:31 PM

    @bill

    was just about to say the same thing. been hearing this for years. we're also about to have an earthquake. because you know, everything i read is true.

  • Johnny on 2014-08-12 3:38:23 PM

    @gar
    negativity only can take you backwards.and you see others passing by you...
    Maybe you are one of those people who go to bed thinking that tomorrow is the end of the world.

  • Ian Scott on 2014-08-12 3:48:35 PM

    Own a 440K Waterloo condo, sons live in it for Univ now 4-6 years. Made sense at the time but special assessment at 10K, and now fees from 375 to 475 in same period, plus tax, still comes less than a 2K rent, but is encroaching on renting.Getting harder to sell them as they approach economics that allow a house purchase given very low mortgage rates.If the mortage rates went up they might look better but until then? and fees keep a 3-4% climb does not forbode well for condo.

  • Ian Scott on 2014-08-12 3:49:02 PM

    Own a 440K Waterloo condo, sons live in it for Univ now 4-6 years. Made sense at the time but special assessment at 10K, and now fees from 375 to 475 in same period, plus tax, still comes less than a 2K rent, but is encroaching on renting.Getting harder to sell them as they approach economics that allow a house purchase given very low mortgage rates.If the mortage rates went up they might look better but until then? and fees keep a 3-4% climb does not forbode well for condo.

  • Collapse on 2014-08-12 4:44:10 PM

    I was told 35 years ago that the crude oil in the earth will go exhausted in 50 years......

    condo market is about to collapse, after that, single house market will also collapse, after that, our economy will collapse, and we will collapse, earth will collapse......

    but it doesn't matter to me, since I already collapse years ago......

  • Collapse on 2014-08-12 4:44:20 PM

    I was told 35 years ago that the crude oil in the earth will go exhausted in 50 years......

    condo market is about to collapse, after that, single house market will also collapse, after that, our economy will collapse, and we will collapse, earth will collapse......

    but it doesn't matter to me, since I already collapse years ago......

  • Ron Butler on 2014-08-12 5:03:57 PM

    There is always the question of survey methodology, let's face it: some folks who have the condo rented out will still say it's owner occupied because that is what they told the bank when they bought it. Nor does the survey really account for empty condos the investor has not decided what to do with.

    Setting that aside this means every sixth door in the GTA and Lower Mainland condo world is a rental. Most interesting is the one in 10 owners who expect to sell at a profit in the next year.

  • DeJong on 2014-08-12 7:02:44 PM

    "let's face it: some folks who have the condo rented out will still say it's owner occupied because that is what they told the bank when they bought it"

    I sure hope they didn't get that advice from a mortgage broker advocating bypassing CMHC down payment requirements at some seminar or something. Cause that would be a shame.

    The survey also clearly says it didn't include investors who don't reside in the metro region, hence any foreign investors or even domestic investor from other cities are not included. Also, it says 17% own investment condos, but 25% of the 17% own multiple condos, so the actual number is much higher.

  • Ron Butler on 2014-08-12 7:11:21 PM

    @ DeJong................. some of them certainly got that advice from some realtor they met. Every week I have to explain to an applicant that no one is going to believe that they are moving from a $750K house to a $375K condo and they should find 20% down payment and forget about the 5% down.

  • DeJong on 2014-08-12 7:22:49 PM

    Got to keep an eye on those sneaky "realtors". There should be heavy fines from regulators for any real estate professional advocating bypassing CMHC regs through misrepresentation/fraudulent means. Right?

  • Blair Andersen on 2014-08-12 11:10:59 PM

    It is impossible to police a mortgage broker who holds seminars on how to get around cmhc rules such as secondary homes, who asks their clients to sign non-disclosure agreements when inviting them to these seminars, and who tells them to close the deals on the same day so that no other lender or insurer know that these "second home" applicants are actually savvy and sophisticated investors getting around the 20% rule.

    But, it does happen.

    But, it's very hard to police because some mortgage brokers are smarter than others in how they propose these ideas.

    Oh and Realtors are the worst source of information for mortgages in my experience. I don't tell a buyer not to buy a house here or there, because of this or that reason, same deal with a Realtor telling my clients about mortgage advice. You do your job, I'll do mine.

  • M. Robertson on 2014-08-13 1:49:51 PM

    I believe that this report is based on a survey or condo owners and is also based on what was reported at the time of funding. So in reality we have no idea how accurate these numbers are...

    From experience as a lender I can tell you that a LOT of brokers will put owner occupied on an application so that they can get it approved. A lot of lender underwriters also turn a blind eye.

    If you want accurate stats you need to survey land tax information. Specifically - where is the tax bill mailed? That will tell you far more about occupancy than a survey.

    @Gar - As for condo fees, in Vancouver they are significantly lower than in Toronto - always have been. To this day I will never understand why ANYONE would buy a condo in Toronto and pay those condo fees. There are tons of examples of condos in Vancouver where the strata manages the funds properly.

    I have a friend who has a 1500 sq foot, waterfront condo in Vancouver and pays $367 in strata fee per month. My cousin has a condo in Toronto, 1 bedroom - about 500 sq feet, and pays $417.00 in condo fees!

  • Versico on 2014-10-22 12:47:07 PM

    If you want to know who lives in the unit they own and who are domestic investors and foreign investors, have stats Canada send out a survey to the board of directors for the condominium corporations. The Corporations have the addresses of all their owners. Many of these addresses are in Asian jurisdictions.

  • Janet on 2014-10-22 2:16:10 PM

    Someone said to me: "What do you expect these people to do with their money? They have to find a safe place for it." It's hardly a problem we should be burdened with. And it's unforgivable that Canadians can't buy a home as a result. Our governments have allowed it and should be made to answer for it and correct it.

  • Angela Wong-Liao - Invis on 2014-12-31 11:23:53 AM

    Thank you CMHC for trying to compose condo data for owner occupied and rental. The data is not complete but it does give us an idea of the percentage.

    It could be difficult to determine the percentage of foreign condo investors as some foreign investors may use their relatives in Canada as purchasers of the condos.

    Yes, I agree that the Canadian real estate market may have a value adjustment in the next couple of years, however, I do not agree that our real estate market is collapsing as other economic data does not support.

    We have decent unemployment rate, our banking system is stable and strong, the real estate market and economy in America are recovering after their financial crisis in 2008.

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