According to a Bank of Canada report:
Investors were responsible for 30 per cent of home purchases in the first three months of the year, according to data released by the Bank of Canada. That is up from 28 per cent in the first quarter of last year, and 22 per cent in the same period in 2020. The central bank defines an investor as a buyer who took out a mortgage to buy the property while maintaining a mortgage on another home.
The effect of investor buying is:
“During housing booms, greater demand from investors can add to bidding pressures and intensify price increases,” said the note. “Similarly, when prices are stable or declining, a lower influx of investors can add downward pressure on housing demand and prices.”
This is the best summary I could come up with:
Investors have become more prevalent in Canada’s housing market, accounting for 30 per cent of all residential real estate purchases in the first part of this year, according to new data.
Over the course of the COVID-19 pandemic, investor buying has grown as soaring home prices ramped up interest in residential properties as an asset class.
The pandemic’s low interest rate environment and the proliferation of marketing promoting real estate investing have encouraged everyday Canadians and investors to buy multiple properties.
“The presence of investors in real estate markets can amplify house price cycles,” the Bank of Canada said in a note accompanying the data.
So far, the federal government has not addressed individual domestic real estate investors as it tries to come up with policies to deal with the lack of affordable housing.
The central bank’s data are designed to shed light on two vulnerabilities facing the Canadian economy: the elevated level of household indebtedness and high house prices.
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