Homeowners in Ontario have developed an appetite for acquiring additional properties -- so much so that this cohort purchased more than a fifth of all homes in the province between 2017 and 2021.
A new report from Teranet revealed that last year multi-property owners -- who bought 22% of homes during the aforementioned period -- were the largest cohort of purchasers in the province, scooping up just over 99,000 homes. The trend continued through the first quarter of this year, as multi-property owners accounted for 26% of home purchases in Ontario.
The report may explain the dwindling number of new listings throughout Ontario’s resale markets in 2021, which drove up benchmark pricing month after month in markets large and small.
As of April 30, 2022, a quarter (24.6%) of homeowners in the province owned more than one home, the Teranet report said. However, the majority of this group own two properties, suggesting that they’re motivated by passive gains rather than using real estate as a business venture.
At 33.6%, Middlesex, located in the London region, has the highest proportion of multi-homeowners in Ontario, followed by Muskoka at 33.4% -- of which 37.2% are owned by people whose real estate portfolios are concentrated in the region -- and Rainy River at 32.1%.
There is also strong evidence that multi-property owners don’t tread too far afield, as 70% of their properties are in the same region, leading Teranet to conclude that they’re most likely investment properties. Moreover, only 28% of multi-property owners’ holdings are condos, signifying strong rental demand for ground-related homes, which are cost-prohibitive for many homebuyers.
Despite High Prices, Toronto Remains an Investment Hotbed
The report also noted that multi-property owners hold 29% of Toronto’s housing stock. Of these properties, 53% belong to owners whose entire portfolios, including primary residences, are based in Toronto, while 14.3% of owners also own homes in York Region, and 10.5% have GTA-wide properties. Teranet determined that 21.6% of the properties are owned by people who also own homes outside of the GTA.
Perhaps unsurprisingly, 59% of housing units in Toronto owned by multi-property owners are condominiums.
Cottage Rentals are Thriving
As noted above, at 33.4%, Muskoka has the highest proportion of housing inventory that belongs multi-property owners. Of those properties, 37.2% belong to people whose portfolios are all Muskoka-based, while 16.6% are owned by those who have additionally own properties in Toronto, and 14.1% have properties in the wider GTA.
At 24%, nearly a quarter of homes in Waterloo belong to multi-property owners, and 52% of those holdings are owned by local investors. Of the aforementioned 24%, 12.8% belong to people who also own GTA-based properties, and 36% are owned by people whose real estate portfolios extend across the province. Of the city’s inventory belonging to multi-property owners, 33% are condominiums, which is largely explained by Waterloo’s large student population.
In It for the Long Haul
Between 2000 and 2017, 42% of multi-property owners in Ontario hadn’t sold a home before their latest acquisition, while 27% had only sold one since their latest purchase, 14% had sold two, and 17% sold at least three. Teranet’s data indicates that those who sold three or more properties were likely short-term investors.
The data also suggests that the average multi-property owner is 44-51 years old, but the average age of dual-property owners is skewing younger -- it was 42-47 years old in 2017, but by 2021 it dropped to 39-43.
