Thursday, December 19, 2013
Investors own less than a quarter of Toronto condominiums: CMHC
Investors are a “strong presence” in both Toronto’s and Vancouver’s condominium markets, but exactly how strong still remains unclear, even in the wake of a new report by the Canada Mortgage and Housing Corporation.
About 23 per cent of Toronto’s condo stock was being rented out by investor-owners in 2012, the federal housing agency says in its annual Canadian Housing Observer review, released Wednesday, which places a special focus on the national condo market this year, revealing some interesting details.
But the review only looks at condos rented via the MLS system and doesn’t include investor-owned units just sitting empty or rented via free websites like Craigslist or word-of-mouth.
“We think the number is closer to 50 per cent,” says veteran Toronto development consultant Barry Lyon. “The data they (CMHC) are using has some shortcomings. It’s only part of the story.”
Mathieu Labarge, CMHC’s deputy chief economist, acknowledged that “to complete the picture there’s a need for data,” and it simply doesn’t exist.
Nobody seems to know exactly where buyers, or their money, is coming from, why they are buying and how they intend to use the condo.
“What we have in terms of hard facts is what we released. We have round tables with the (condo development) industry on a regular basis and what we get is that investment activity remains limited.”
Local housing experts, economists and realtors also lack hard numbers, but anecdotal evidence suggests at least 40 per cent of Toronto’s condo market is investor owned and that the number is even higher — as much as 90 per cent — in some downtown skyscrapers close to transit lines.
It’s widely known that investors have helped drive record condo sales across the GTA the last few years and Laberge says those units have been critical to providing rental housing in a growing region where almost no new purpose-built rental apartments have been constructed in decades.
According the CMHC annual review, about 26 per cent of Vancouver’s condos were tenanted, rather than lived in by owners, as of last year, a number that has been growing right across Canada since 2007.
That figure is also being questioned, given concerns that have abounded in that market around foreign buyers looking to park money in Canada, but leave their units empty.
As the CMHC report notes, condo construction and ownership has exploded over the last three decades, from just 171,000 units in 1981 to 1.6 million in 2011, a rate of growth more than nine times faster than single-family homes.
Some 461,000 of those condos were being rented out in 2011, according to the report.
Condos accounted for almost half — 40 per cent — of all housing starts in Canada’s major cities in 2012.
Skyscraping condos dominate Toronto’s skyline far more than any other urban landscape in Canada — accounting for about 70 per cent of the total stock of condominium housing. But, across the rest of the country, highrises account for just 31 per cent of all condo types, followed by lowrise condo apartment buildings at 36 per cent and townhomes and row houses at 23 per cent.
While condos now attract a broad spectrum of buyers, they remain most popular with seniors and young adults: As of 2011, 19 per cent of condo owners were under the age of 35 and 29 per cent were 65 or older.
Just 16 per cent were couples with children, says CMHC. Some 42 per cent of condo owners live alone. Twenty-eight per cent are couples with no children.
And women dominate sales centres: They made up 65 per cent of all owner-occupied condominiums in 2011, and accounted for 76 per cent of owners aged 55 or older.
Condo construction in Toronto and Vancouver accounted for more than half of the country’s condo starts in 2012, says the comprehensive report, which looks at everything from affordable housing to the growth of factory-built housing in over 160 municipalities from coast to coast.