By Joshua Gordon and Joanie Fontaine
Release date: May 23, 2023
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- Overview
- Key findings
- Introduction
- What is an investor?
- Looking at different investor types across provinces
- Established immigrants are investors at higher rates than Canadian-born residents
- The majority of investors are 55 and older
- Men are overrepresented among investors with three or more properties
- There is a significant presence of investor-occupants in urban British Columbia
- Note to readers
- Definitions
- References
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Overview
This articlepresents a detailed profile of residential real estate investors in theprovinces of Nova Scotia, New Brunswick, Ontario, Manitoba and British Columbiain 2020. It documents the demographic characteristics of investors, includingage, sex and immigration status. It also looks at the geographic distributionof investors in certain provinces. The article is the second in a series onresidential real estate investors produced by the Canadian Housing StatisticsProgram.
Key findings
- Among the provinces studied, Nova Scotia, NewBrunswick and British Columbia had the highest share of out-of-provinceinvestors and non-resident investors.
- The share of in-province investors owning three or more properties in the housing stock ranged from 1.6% of all owners in New Brunswick to 2.9% in Ontario.
- Established immigrants—those who landed before 2010—comprised a higher share of investors than their share of the provincial populations.
- Residents aged 55 and older represented a higher proportion of investors than their share of the provincial populations.
- Women represented around half of all resident investors in the five provinces but were underrepresented among in-province investors with three or more properties in the housing stock, relative to their share of the provincial populations.
Introduction
In recent years, there has been growingconcern about the role of residential real estate investors in Canada(Younglai, 2021a and b; Bank of Canada, 2021; Khan and Xu, 2022; Pasalis, 2022;House of Commons, 2022). While investors can provide needed rental stock, theyhave also been found to exacerbate house price volatility and can limit housingmarket access for first-time homebuyers (Haughwout et al., 2011; Allen et al.,2018; Caranci et al., 2022). As house prices increased sharply during thepandemic, several reports indicated that investors had begun to play a moreprominent role in the Canadian housing market (Khan and Xu, 2022; Teranet,2022). The Canadian Housing Statistics Program (CHSP), using comprehensiveadministrative data, contributes to an understanding of that role in a seriesof publications and data releases on the topic.
This article follows an initialarticle released earlier this year thatmainly focused on the share of properties used as an investment across fiveprovinces – Nova Scotia, New Brunswick, Ontario, Manitoba and British Columbia– by property type and by investor type (Fontaine and Gordon, 2023). In the presentarticle, the CHSP provides additional information about the profile ofinvestors in those five provinces. Specifically, it examines the demographiccharacteristics of investors and distinguishes between different types ofinvestors to help clarify the nature of their role in housing markets.
What is an investor?
The analysisbelow classifies owners into one of three categories: investors,investor-occupants and non-investors.
An investor is an owner of at least one residentialproperty that is not used as their primary place of residence. This categoryincludes
- A business or government that owns at least oneresidential property, excluding Canadian non-profit organizations. Given thepredominance of businesses in this category, they will simply be referred to asa “business investor” in what follows.
- A person who is not a current resident of Canadaand is a residential property owner, referred to as a “non-resident investor”.
- A person who lives outside the province wherethey own residential property, referred to as an “out-of-province investor” inthe province of the non-principal residence.
- A person who lives in the province and owns twoor more residential properties, or owns a property with multiple residentialunits and does not occupy that property. These persons will be referred to as“in-province investors”.
By contrast, investor-occupantsown a single property with multiple residential units, one of which is theirprimary place of residence. For example, this category includes owners of ahouse with a laneway unit or basement suite and owners of a duplex who live inone of the units.
Lastly, non-investors are owners who are not aninvestor or an investor-occupant. This category primarily includes owners of asingle property that does not have multiple residential units who live in theprovince where their property is located. Canadian non-profit businesses arealso included in this category.
Looking at different investor typesacross provinces
The share of the different investor typesset out above can be compared by province (Chart1). This comparison isuseful because different types of investors may have distinct purposes forowning investment properties andmay thus have distinct demographic profiles and differing impacts on thehousing market.
Among these investor types, one importantdistinction is between in-province investors with multiple properties that arepart of the housing stock (i.e., properties that are not vacant land) and thosewho own one property in the housing stock and only parcels of vacant land inaddition. This vacant land is often adjoined to the property of the primaryresidence and is used as an extension of that property. In Chart1, thesetypes of investors, along with those who own two or more properties of vacantland only, are called “in-province investors—vacant land.”Note
We find that investors with this profile weresimilar to non-investors in terms of average income, assessed value ofresidential property holdings and the relative absence of rental income. Whenthey are excluded, most provinces had similar rates of in-province investorsamong all owners (between 12.6% in Manitoba and 13.6% in Ontario), with a lowerrate in New Brunswick (10.0%).
Data table for Chart 1
| Nova Scotia | New Brunswick | Ontario | Manitoba | British Columbia | |
|---|---|---|---|---|---|
| percent | |||||
| In-province investor | 13.4 | 10.0 | 13.6 | 12.6 | 13.4 |
| In-province investor—vacant land | 7.2 | 8.6 | 1.7 | 2.7 | 1.4 |
| Out-of-province investor | 3.8 | 3.0 | 0.5 | 1.4 | 2.7 |
| Non-resident investor | 5.6 | 5.5 | 3.0 | 2.3 | 4.0 |
| Business investor | 1.7 | 1.9 | 1.5 | 1.4 | 1.8 |
| Investor-occupant | 1.8 | 2.5 | 0.8 | 0.7 | 9.6 |
| Source: Statistics Canada, Canadian Housing Statistics Program (CHSP). | |||||
The rate of out-of-province investors in Ontario (0.5%) and Manitoba (1.4%) was relatively lower than in British Columbia (2.7%), New Brunswick (3.0%) and Nova Scotia (3.8%). In British Columbia, higher rates of out-of-province investors were found in areas along the southern portion of the British Columbia-Alberta border. For example, in the regional municipality of Invermere, 40.9% of owners were out-of-province investors, and this rate reached 69.2% in Radium Hot Springs.
In New Brunswick and Nova Scotia, aregional analysis reveals that a high proportion of properties owned byout-of-province investors were in areas near the Atlantic coast or provincialboundaries.
The rate of investor-occupants was highestin British Columbia (9.6%) and significantly lower in the other provinces. Thisphenomenon is examined in greater detail in the final section of the article.Other CHSP releases have examined variations in the rates of non-residentownership and businessownership; thus, these investor types are not detailed here.
Differentiating among in-provinceinvestors
It is also possible to furtherdifferentiate the category of in-province investors (those who reside in theprovince where they own investment properties). This can be done based on thenumber of properties they owned and the location of their secondary properties(Chart2). In this section, “in-province investors – vacant land” areexcluded, and thus all properties are assumed to be in the housing stock.
Data table for Chart 2
| Nova Scotia | New Brunswick | Ontario | Manitoba | British Columbia | |
|---|---|---|---|---|---|
| percent | |||||
| In-province investor—three or more properties | 2.6 | 1.6 | 2.9 | 2.2 | 2.8 |
| In-province investor—two properties in the same region | 7.3 | 5.6 | 6.2 | 6.4 | 7.1 |
| In-province investor—two properties in different regions | 3.5 | 2.8 | 4.4 | 4.1 | 3.4 |
| Note: In this chart, the number of properties excludes vacant land. In-province investors who own one property with multiple residential units and who do not reside in one of those units are included in the category of “in-province investor–two properties in the same region”. Source: Statistics Canada, Canadian Housing Statistics Program (CHSP). | |||||
One distinct profile among in-provinceinvestors are those who own a single additional property in a different regionthan where their principal residence is located.Note In many cases, these may be recreational property owners, rather than landlordswho often own multiple properties in the same region.Note An analysisof declared rental income among these different in-province investor typesfound that investors with a potential recreational property profile (twoproperties in different regions) were around half as likely to declare rentalincome in their tax family than those with a potential landlord profile (twoproperties in the same region or three or more properties). In BritishColumbia, for example, 61.8% of the latter type declared rental income in theirtax family, compared with 35.4% of the former type. In Ontario, the figureswere 61.5% and 25.7%, respectively.Note
In-province investors can also be distinguished by whether they have only one additional property or whether they own three or more properties (Chart2). Similar rates of these larger-scale in-province investors were found across provinces, ranging from 1.6% of all owners in New Brunswick to 2.9% in Ontario.
Investor incomes
Out-of-province investors had the highest average incomes in all five provinces (Table1) compared with other types of investors. Among in-province investors, those with three or more residential properties had the highest incomes across all provinces, followed by those with only a single additional property in a different region—a situation consistent with holding a potential recreational property. In-province investors with two properties in the same region had the next highest incomes, while those with vacant land had the lowest incomes among all resident-investor types. In most provinces, investors who only owned vacant land in addition to their principal residence had average incomes similar to those of non-investors and investor-occupants.
| Investor type | B.C. | Man. | Ont. | N.B. | N.S. |
|---|---|---|---|---|---|
| Dollars | |||||
| In-province investor—three or more properties | 115,000 | 80,000 | 110,000 | 80,000 | 80,000 |
| In-province investor—two properties in the same region | 80,000 | 65,000 | 80,000 | 55,000 | 60,000 |
| In-province investor—two properties in different regions | 100,000 | 75,000 | 105,000 | 70,000 | 75,000 |
| Out-of-province investor | 150,000 | 85,000 | 120,000 | 85,000 | 95,000 |
| Investor-occupant | 65,000 | 50,000 | 60,000 | 50,000 | 55,000 |
| Non-investor | 65,000 | 60,000 | 65,000 | 55,000 | 55,000 |
| Source: Statistics Canada, Canadian Housing Statistics Program (CHSP). | |||||
Established immigrants are investors at higher rates than Canadian-born residents
Previous releases from the CHSP have foundthat the share of homeowners who are immigrants in each province correspondsclosely to the share of immigrants in the overall provincial population. Inother words, immigrants appear to be able to access homeownership at a similarrate to that of Canadian-born residents. Among individual resident investors, however,immigrants were underrepresented, relative to their share of the provincialpopulation, in Nova Scotia, New Brunswick and Manitoba (Chart3).Note This is mostlydue to fewer recent immigrants (those who landed in Canada since 2010) beinginvestors.Note Established immigrants, on the other hand, made up ahigher proportion of investors than their share of the population in theseprovinces. In Ontario and British Columbia, both immigrants in general andestablished immigrants were overrepresented among investors, relative to theirshare of the provincial population.
Data table for Chart 3
| Nova Scotia | New Brunswick | Ontario | Manitoba | British Columbia | |
|---|---|---|---|---|---|
| percent | |||||
| Share of investors who are immigrants | 6.0 | 3.8 | 33.2 | 15.1 | 31.9 |
| Share of non-investor owners who are immigrants | 6.7 | 4.8 | 32.2 | 20.3 | 29.3 |
| Share of population that is immigrant (Census 2021) | 7.5 | 5.8 | 30.0 | 19.7 | 29.0 |
| Note: Calculations are based on resident owners and exclude owners whose immigration status is unknown. Source: Statistics Canada, Canadian Housing Statistics Program (CHSP). | |||||
The assessed value of the property holdingsof immigrant investors tended to be higher than that of Canadian-born investorsin all five provinces.Note For example, the average assessed value of immigrant investors’ total propertyholdings was $2,200,000 in British Columbia, compared with $1,610,000 forCanadian-born investors. The property holdings in Ontario were on average $1,290,000for immigrant investors and $890,000 for Canadian-born investors. In the otherprovinces, the differences in the average value of the total property holdingsbetween immigrant and Canadian-born investors were smaller in absolute terms.In each province, though, most of this difference was explained by the factthat immigrant investors were more likely to own a primary residence in alarger census metropolitan area (CMA), where assessment values tend to behigher than in other parts of the respective provinces. When looking atinvestors with primary residences in the same census subdivisions (CSDs), thedifference in average assessed value between immigrant and Canadian-borninvestors was smaller.
In Ontario, Manitoba and British Columbia,the average income of immigrant investors was lower than that of Canadian-borninvestors. The disparity in incomes was most pronounced in British Columbia andOntario. In British Columbia, Canadian-born investors had an average individualincome of $105,000, whereas immigrant investors had an average individual incomeof $80,000. In Ontario, the average individual income was $80,000 for immigrantinvestors and $100,000 for Canadian-born investors. In Nova Scotia, the averageincome of immigrant investors ($75,000) was higher than Canadian-born investors($65,000). This pattern was also found in New Brunswick, where the averageincome of immigrant investors ($65,000) was higher than Canadian-born investors($60,000).
The majority of investors are 55 andolder
Residents aged 55 years and older were overrepresented among homeowners relative to their share of the population. This is consistent with the idea that purchasing a home often requires a lengthy period of saving and the higher incomes usually associated with longer experience in the labour market. For similar reasons, residents 55 and older were even more overrepresented among investors (Chart4). In all five provinces, they constituted the majority of resident investors—from 57.1% in Ontario to 66.9% in Nova Scotia—despite being a minority of the adult population in each province, from 39.8% in Manitoba to 48.3% in New Brunswick.Note
Conversely, Canadians younger than 35 weresignificantly underrepresented among investors relative to their share of theadult population (Chart5). This underrepresentation among investors waseven more pronounced than their underrepresentation among homeowners and likelyoccurred for similar reasons: fewer income-earning years make it more difficultto accumulate the financial capital required for homeownership and, especially,real estate investment.
Data table for Chart 4
| Nova Scotia | New Brunswick | Ontario | Manitoba | British Columbia | |
|---|---|---|---|---|---|
| percent | |||||
| Younger than 35 | 4.0 | 4.4 | 5.1 | 6.6 | 4.9 |
| 35 to 54 years old | 29.1 | 29.5 | 37.8 | 35.3 | 36.5 |
| 55 and older | 66.9 | 66.1 | 57.1 | 58.1 | 58.5 |
| Note: Calculations are based on resident owners and exclude owners with unknown age. Source: Statistics Canada, Canadian Housing Statistics Program (CHSP). | |||||
Data table for Chart 5
| Nova Scotia | New Brunswick | Ontario | Manitoba | British Columbia | |
|---|---|---|---|---|---|
| percent | |||||
| Share of investors younger than 35 | 4.0 | 4.4 | 5.1 | 6.6 | 4.9 |
| Share of non-investor owners younger than 35 | 9.6 | 11.0 | 10.7 | 12.8 | 9.7 |
| Share of the adult population that is 20 to 34 years old (2021 Census) | 22.7 | 20.5 | 25.5 | 27.1 | 24.6 |
| Note: Calculations are based on resident owners and exclude owners with unknown age. Source: Statistics Canada, Canadian Housing Statistics Program (CHSP). | |||||
Men are overrepresented among investorswith three or more properties
Women and men constituted a similarproportion of investors in the five provinces. Among resident investors, the proportionof investors who are male ranged from 50.2% in British Columbia to 56.2% in NewBrunswick.Note This indicates that there was a limited difference between men and women in thepropensity to engage in real estate investment. It is notable, though, that menwere overrepresented among investors with three or more properties in the housing stock.This may suggest a more significant difference between men and women in thepropensity to become larger-scale investors.
Despite this, the average assessed value ofinvestors’ real estate holdings was similar between men and women in all fiveprovinces.
Consistent with the pattern among allhomeowners, the average income of female investors was significantly less thanthat of male investors. This disparity was the largest in British Columbia andOntario. In British Columbia, the average income for male investors was $125,000compared with $70,000 for female investors. In Ontario, those same figures were$115,000 and $75,000, respectively. These statistics align with previousCHSP findings for real estate buyers in Nova Scotia, New Brunswick andBritish Columbia that showed that female buyers had lower incomes than malebuyers, but purchased homes with similar prices.Note
Data table for Chart 6
| Nova Scotia | New Brunswick | Ontario | Manitoba | British Columbia | |
|---|---|---|---|---|---|
| percent | |||||
| Male proportion of non-investor owners | 48.3 | 49.3 | 47.5 | 48.8 | 47.5 |
| Male proportion of in-province investors with two properties | 51.0 | 55.4 | 50.1 | 51.4 | 49.2 |
| Male proportion of in-province investors with three or more properties | 54.4 | 60.9 | 52.9 | 55.0 | 51.2 |
| Note: The number of properties excludes vacant land. Calculations are based on resident owners and exclude owners with unknown sex. In-province investors who have one property with multiple residential units and who do not reside in one of those units are included in the category of owners of two properties. Source: Statistics Canada, Canadian Housing Statistics Program (CHSP). | |||||
There is a significant presence ofinvestor-occupants in urban British Columbia
In some expensive urban markets,densification has produced a high number of properties with multipleresidential units, such as rental apartment buildings and condominium apartmenttowers. While densification can take the form of large buildings, it can alsoemerge through more incremental forms of density, such as single-detachedhouses with secondary suites or laneway units, duplexes, or triplexes. Thislatter form of density can produce high rates of investor-occupants (people whoown a single property with multiple residential units and live in one of theunits).
CHSP data show that this phenomenon isespecially prominent in urban British Columbia.Note In the CMAof Vancouver, 12.5% of owners were investor-occupants. In the core CSD, theCity of Vancouver, this proportion was 15.9%. This may be attributable tomunicipal efforts in the City of Vancouver to promote incremental density, suchas lanewayhomes, secondary suites and duplexes. Theshare of investor-occupants among all owners was also higher than theprovincial average in the CMA of Victoria, at 12.2%. In the Victoria CMA, therate of investor-occupants was highest in the CSDs of Saanich (13.3%), Colwood(14.6%) and Langford (16.5%).
As noted above, investor-occupants hadaverage incomes that were similar to those of non-investors, but lower thaninvestor incomes, in the four CMAs of British Columbia: Abbotsford–Mission, Kelowna, Vancouver and Victoria.For instance, in the Vancouver CMA, the average income for investor-occupantswas $65,000, compared with $65,000 for non-investors and $100,000 forin-province investors.
Despite this, the average assessed value ofthe properties owned by investor-occupants was typically higher than that fornon-investors in British Columbia. In the CMA of Vancouver, the properties ofinvestor-occupants had an average assessed value 34.7% higher than theproperties of non-investors, while in Victoria they were 6.0% higher.
Description for map 1
The title of the map is: “Proportion of investor-occupants by census subdivision, Vancouver and Victoria census metropolitan areas, 2020.” This figure displays two maps of the census subdivisions (CSDs) of the census metropolitan area (CMAs) of Vancouver (top) and Victoria (bottom).
Each CSD is shaded from light to dark purple based on the proportion of owners that are investor-occupants. The darker the shade, the higher the proportion investor-occupants in that CSD. The map shows that there is a higher proportion of investor-occupants in the City of Vancouver and Surrey CSDs in the Vancouver CMA, and a higher proportion of investor-occupants in the Langford and Colwood CSDs in the Victoria CMA.
| Census subdivision name | Proportion of investor-occupants as a share of owners by CSD (percentage) |
|---|---|
| CMA Vancouver | |
| Anmore, Village | 5.7 |
| Belcarra, Village | 13.2 |
| Bowen Island, Island municipality | 4.7 |
| Burnaby, City | 9.3 |
| Coquitlam, City | 9.7 |
| Delta, District municipality | 10.8 |
| Greater Vancouver A, Regional district electoral area | 0.3 |
| Langley, City | 5.5 |
| Langley, District municipality | 10.6 |
| Lions Bay, Village | 8.7 |
| Maple Ridge, City | 9.5 |
| New Westminster, City | 10.1 |
| North Vancouver, City | 8.2 |
| North Vancouver, District municipality | 13.2 |
| Pitt Meadows, City | 6.5 |
| Port Coquitlam, City | 12.1 |
| Port Moody, City | 3.9 |
| Richmond, City | 4 |
| Surrey, City | 16.2 |
| Vancouver, City | 15.9 |
| West Vancouver, District municipality | 4.5 |
| White Rock, City | 11.5 |
| Victoria | |
| Central Saanich, District municipality | 10.6 |
| Colwood, City | 14.6 |
| Esquimalt, District municipality | 12.1 |
| Highlands, District municipality | 4.6 |
| Juan de Fuca (Part 1), Regional district electoral area | 5.1 |
| Langford, City | 16.5 |
| Metchosin, District municipality | 6.9 |
| North Saanich, District municipality | 8 |
| Oak Bay, District municipality | 6 |
| Saanich, District municipality | 13.3 |
| Sidney, Town | 8.4 |
| Sooke, District municipality | 11.3 |
| Victoria, City | 9.5 |
| View Royal, Town | 12.2 |
| Source:Statistics Canada, Canadian Housing Statistics Program (CHSP). | |
Note to readers
The CHSP is an innovative data project thatleverages data sources and transforms them into new and timely indicators onCanadian housing.
The data in this study are compiled fromthe CHSP for the 2020 reference year. Complete information about the referenceyears of the property stock, by province and territory, is available here.
In the calculation of the rate of differentinvestor types by CSD, all owners of residential property in each respectiveCSD are included.
Homeowners for the2020referenceyear are linked to the tax data from the T1Family File (T1FF) for the 2019tax year. Data in theT1FFinclude all individuals who filed a T1IncomeTax Return, combined with other administrative files from theCanada Revenue Agency.
Definitions
An investor is defined as an owner of at least oneresidential property that is not used as their primary place of residence,excluding Canadian non-profit organizations. A person who owns a singleproperty in the province where they reside is not considered an investor unlessthey own a property with multiple residential units. This category excludesinvestor-occupants.
An investor-occupant owns a single property withmultiple residential units and occupies that property.
A non-investor is an owner who is not an investor oran investor-occupant. An owner of a single property who lives in the propertyis included in this category unless they own a property with multipleresidential units.
A person is considered a non-resident if theirprimary dwelling is outside the economic territory of Canada.
Housing stock refers to all residential properties,excluding vacant land.
References
Allen, M.T., Rutherford, J., Rutherford, R., Yavas, A.(2018). Impact of Investors in Distressed Housing Markets. The Journal ofReal Estate Finance and Economics. 56. 622-652.
Bank ofCanada (2021). Financial System Review, 2021. Bank of Canada.
Caranci, B.,Fong, F., Gebreselassie, M. (2022). Ishousing perpetuating a wealth divide in Canada? TD Economics.
Fontaine, J., Gordon,J. (2023). Residential real estate investors and investment properties in 2020.Canadian Housing Statistics Program: Statistics Canada.
Gellatly, G.,Morissette, R. (2019). Immigrant ownership of residential properties in Torontoand Vancouver. Canadian Housing Statistics Program: Statistics Canada.
Gougeon, A., Moussouni,O. (2021). Residential real estate sales in 2018: Who is purchasing realestate? Canadian Housing Statistics Program: Statistics Canada.
Haughwout,A., Lee, D., Tracy, J., and van der Klaauw, W. (2011). Real estate investors,the leverage cycle, and the housing market crisis. Staff Reports514,Federal Reserve Bank of New York.
House ofCommons (2022). M-71 Affordable Housing Strategy. Private Member Motion.
Khan, M.,Xu, Y. (2022). Housing demand in Canada: A novel approach to classifyingmortgaged homebuyers. Staff Analytical Note 2022-1, Bank of Canada.
Pasalis, J.(2022). The Good, the Bad, the Ugly for Toronto Real Estate. Realosophy: MoveSmartly Report.
Teranet. 2022. MarketInsights – The Canadian Source for Housing Information – Q2 2022, https://www.teranet.ca/wp-content/uploads/2022/06/Teranet-Market-Insight-Quarterly-Report-Q2-2022.pdf (accessed September12, 2022).
Younglai, R.(2021a). “Investors account for a fifth of home purchases in Canada. Are theydriving up housing prices in a booming market?” The Globe and Mail, June22, 2021.
Younglai, R.(2021b). “Average home costs are up 30% since before the pandemic, a spike CMHClinks to speculative investors.” The Globe and Mail, November 24, 2021.
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