Over half of the condo apartments built in Toronto in recent years were owned by investors, according to new data from Statistics Canada.
From 2016 to 2021, investors owned 37,580 newly constructed condos in Toronto, accounting for 56.7% of new builds.
It seems that this percentage of investor-owned condos in the city is on the rise. Looking at 2016 to 2020 — removing the most recent year of available data — the share of new condos owned by investors was smaller, at 55.2%.
All other property types in Toronto saw smaller — albeit still substantial — percentages of investors buying new builds. For properties built between 2016 and 2021, 32% of row houses, 23% of semi-detached houses, and 13.6% of single-detached houses were owned by investors.
Statistics Canada defines an investor as a property owner with more than one residential property that was not used as their primary place of residence.
Similar numbers were seen in Canada's most expensive city, Vancouver. For condo apartments built between 2016 and 2021, 47.9% were owned by investors. Nearly a quarter of row houses (23.4%) and semi-detached houses (21.5%) were owned by investors, meanwhile, 15.3% of new single-detached homes were investor-owned.
Other popular Ontario cities have also followed suit, with Hamilton seeing 55.5% of condo apartments built between 2016 and 2021 owned by investors. In London, that number reached a staggering 80.5%, and in Kitchener-Cambridge-Waterloo, it's 71.7%.
How these numbers will change when data for 2022 and 2023 is included will be interesting to watch. As interest rates have skyrocketed over the past year and a half, investment properties have become riskier or, for some, financially unattainable.
A report released in May of this year by Urbanation and CIBC Economics found that more than half of Greater Toronto Area investors were losing money on properties. Newly completed units in particular were called out as not being cash-flow positive as mortgage costs, condo fees, and property taxes outpaced rents.
"In order for new condo investing to continue to make economic sense over the long-term, new condo prices should generally grow in line with resale prices and rents," the report reads. "Recently, however, we have seen a big deviation, which could make it increasingly difficult for investors to earn returns. In the past five years, new condo prices have increased 58% — nearly double the growth in condo resale prices and rents."
