More than a third of Toronto’s condominiums are owned by people who don’t live in them, according to new government figures which suggest that more cities across Canada could be facing a growing struggle with housing affordability.
Figures released this week by Statistics Canada show that 39.7% of Toronto condos are not owner-occupied, meaning they are either vacant, rented or used as a second property.
The new statistics offer further evidence that people now view housing as an investment, and not necessarily as a place to live, said Andy Yan, the director of the City Program at Simon Fraser University in Vancouver.
Yan said the data shows that housing prices have “decoupled” from income, and are instead driven by access to capital – giving investors a clear advantage over average Canadians. “It’s not about supply or demand any more,” said Yan. “It’s: who are we building for?”
Worries about Canada’s overheated property market have until now focused on Vancouver, where just 12% of families can afford to own a home, and where nearly half of condos are owned by investors.
Punitive taxation on unused property and foreign buyers is having some success on the issue of foreign ownership but Vancouver still ranks just behind Hong Kong as the second-least affordable city in the world.
In Toronto, Canada’s most populous city, investor-owned properties are contributing to rising condo prices and a crunch on affordable rental housing.
Toronto has created little purpose-built rental housing in the past 40 years, leading to an overreliance on the secondary housing market for rental inventory. A housing bubble, meanwhile, led to inflated condo purchase prices and subsequent rents. Analysis done by the city of Toronto shows condo rents rose by 30% between 2006 and 2018.
John Pasalis, housing market analyst and president of Realosophy Realty, said developers are more than happy to build luxury and micro-condos for wealthy investors, rather than affordable family homes for average Torontonians.
“Five years down the road, do we really need 50,000 micro-condominiums that are renting for C$2,000 a month?” asked Pasalis. “I think this is the risk when your entire new housing supply is driven by what investors want, rather than what end users want.”
The latest figures are the result of a new methodology that relies on administrative data and public records, rather than census-style surveys, to answer questions about non-resident ownership in Canada. “What’s unique to Canada is how we’re using the data to answer some of those questions,” said the Statistics Canada chief, Jean-Philippe Deschamps-Laporte.
The goal of the Canadian Housing Statistics Program is to extract valuable information from existing databases – including hospital records, immigration files and tax returns – to paint the country’s most accurate portrait yet of home ownership in Canada.