Nearly one in 10 residential properties sold in the Waterloo region are either flipped or rented out, according to a new report by Canada Mortgage and Housing Corporation.
In the period covering January 1, 2015 up to June 30, 2018, roughly 9% of all homes that were sold in Kitchener, Waterloo, and Cambridge were resold for higher prices after a short period (within 24 months), or were acquired for investment purposes.
“Perhaps unsurprisingly, investment activity became more pronounced as the pace of average price growth increased, which makes intuitive sense since there is larger potential gains to be realized in a market where prices are growing rapidly,” CMHC said in the report, as quoted by CBC News.
Moreover, a significant proportion of those involved in such transactions were not even residents. As much as one in five buyers did not have addresses in any of the region’s markets, the report added.
Of these non-local buyers, fully 72% hailed from the Greater Toronto Area, with much of the remainder coming from Guelph and Hamilton.
Among the three cities, Kitchener had the highest incidence of house flipping and investment, with activity consistently rising from 2012 to 2018. CMHC noted that this was “partly because Kitchener has the largest population.”
The region’s ION LRT also played a significant role in these developments: CMHC stated that back in 2012, around 7.8% of flipped and investment assets were situated less than a kilometre from an LRT station. This proportion grew to 14.4% in 2017.