Bank of Canada researchers recently published an analysis of the different types of buyers with a mortgage in Canada. This analysis, in addition to having a detailed section on their methodology, presents the medium-term growth from investors in Canadian real estate transactions. Here are the highlights:
We can notice that home purchases by Canada’s various types of buyers have historically moved in tandem.
However, this pattern seems to be fading away in 2021, with an annualized increase of new mortgages given to investors of almost 100% during the second trimester of 2021, compared to 66% for repeat homebuyers and 47% for first-time homebuyers.
The analysis notes that the last time the market share of purchases by investors rose more than the first-time homebuyers’ share was in 2017, when there was an increase of overbidding in Toronto and its surroundings.
The result of this trend is that the market share of first-time buyers in Canada’s real estate market as decreased since 2015, creating an increase of repeat homebuyers and investor’s market share.
Canadian cities were not all similarly affected by this process; the Ottawa-Gatineau metropolitan area had a significant increase in purchases by investors from 2014 to the first trimester of 2021 and the second trimester of 2021. Montréal also had a relatively significant increase of investors, while they decreased in Quebec City.
