Saturday, May 31, 2025

Latest

Investor Influence in Canadian Housing Market Surges to 30% in 2023

Investors are increasingly shaping Canada’s housing market, with their influence growing steadily, according to recent data from the Bank of Canada. 

In the first quarter of this year, investors were responsible for 30% of residential real estate purchases, up from 28% in the same period last year and 22% in 2020. The central bank defines investors as those who take out mortgages to acquire property while maintaining a mortgage on another home.

Meanwhile, the percentage of first-time homebuyers has decreased from 48% in early 2020 to 43% in the first quarter of 2023, while repeat buyers dropped from 30% to 27.5% over the same period. This shift underscores the changing dynamics in the Canadian housing market.

The Bank of Canada’s data highlights the significant impact investors have on housing trends, with their presence potentially amplifying house price cycles. During housing booms, increased investor demand can drive up prices further, while during stable or declining market conditions, fewer investors can contribute to decreased demand and lower prices.

Read: Yet Another Fire Claims More Under-Construction Homes in GTA

The COVID-19 pandemic, coupled with a low-interest-rate environment and aggressive marketing promoting real estate investing, has encouraged Canadians to invest in multiple properties. However, the federal government has focused its housing policies on foreign buyers, with a ban on purchases until the end of 2024, without addressing domestic investors.

The central bank’s data also underscores two key vulnerabilities in the Canadian economy: high household indebtedness and soaring house prices. While mortgage delinquencies remain steady at 0.12%, there has been a slight increase in highly indebted borrowers with mortgages 4.5 times greater than their annual income. 

Read: As the Cost of Living Continues to Rise, Household Debt Jumps to $2.34 Trillion in Canada

Additionally, 29% of new mortgage borrowers spend more than 25% of their gross income on mortgage payments, indicating vulnerability to rising interest rates or income loss.

Despite these concerns, there are signs of improvement in some areas. The share of homeowners making down payments of less than 20% has decreased from 18% in 2020 to 12% in the second quarter of 2023. Home flipping has also seen an increase over the past two years, but it still accounted for less than 3% of transactions in the first quarter, suggesting overall market stability.


Information for this story was found via the Globe and Mail, Toronto Star, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Leave a Reply

Video Articles

How To Profit From $3300 Gold? An Inside Look At A Massive 300,000 Oz Project | Martino De Ciccio

We’re At The Start of a Great Silver Boom | Ross McElroy & Andy Bowering – Apollo Silver Corp

Equinox Gold Q1 Earnings: When Everything Goes Wrong

Recommended

ESGold Begins Concentration Tests Ahead Of First Production

Sterling Metals Hits 0.21% Copper Over 482.8 Metres In First Drilling At Soo Copper project

Related News

25,000 Canadians Are Demanding Homeowner Relief Amid Rising Interest Rates

Canadians are definitely feeling the pinch of rising interest rates. In a petition on Change.org,...

Monday, October 17, 2022, 05:07:00 PM

Housing Affordability Crisis: Ontario Developers Offer Tax Cut Solution

A group of Ontario developers has proposed significant tax reductions on new homes, in a...

Friday, August 2, 2024, 10:47:00 AM

A Majority of Canadians Support Trudeau’s Immigration Push, New Survey Says

Despite the housing crisis, the sentiment toward the Trudeau government’s push for immigration appears to...

Friday, March 10, 2023, 07:26:08 AM

Canadian Housing Starts Fell by 20% in September as Summer Rebound Slows Down

As the economy transitions into the fall and winter season, there has been a consensus...

Thursday, October 8, 2020, 02:33:09 PM

Condo Investors “Losing” Money Could Spell Trouble For Toronto Renters

According to a recent joint report by market research firm Urbanation and CIBC Capital Markets,...

Tuesday, May 30, 2023, 11:01:12 AM