The Influence of Immigrants on Ontario's Housing Market

In a recent report by Statistics Canada, a profile of residential real estate investors in Ontario has shed light on some intriguing trends. The study aimed to address concerns surrounding the number of investor-owned homes amid affordability challenges, particularly in cities like Toronto.

Key Findings:
- In 2020, only a fraction, a mere 0.5%, of residential real estate investors in Ontario lived outside the province.
- Most investors were over the age of 55 and had an income of $110,000 or less, with a significant portion being immigrants.
- Newcomers who arrived before 2010 comprised a higher proportion of investors compared to their population share in the five provinces examined, including Ontario, British Columbia, Manitoba, New Brunswick, and Nova Scotia.
- However, immigrant investors, on average, had a lower annual income of $80,000 in Ontario, compared to their Canadian-born counterparts, who averaged $100,000.

The Influence of Immigrants on Ontario's Housing Market:
The data reveals the vital role that newcomers play in driving housing investment in Ontario, particularly in the Greater Toronto Area (GTA). New immigrants emerge as a driving force behind rising condo investments and new condo sales—a trend observed by Shaun Hildebrand, president of Urbanation, a company specializing in market research for the development industry.

Ownership and Investment Property Types:
Earlier data shared by Statistics Canada in February demonstrated that roughly 15% of all homes in Ontario were investor-owned, spanning various property types, from single-family houses to mobile homes. Notably, about 42% of condos were investor-owned.

Exploring Occupancy and Zoning:
The report suggests that urban areas with zoning for higher densities, like Vancouver and Victoria in British Columbia, showed higher proportions of investor-occupied properties—9.6%, including secondary homes, laneway suites, duplexes, and triplexes. In comparison, only 0.8% of investment properties in Ontario were owner-occupied. Recent zoning changes in Toronto now permit laneway and garden suites, as well as secondary suites, as an effort to boost density in areas already equipped with necessary facilities and services.

Implications and Future Investments:
Reflecting on the findings, Hildebrand emphasizes that Ontario requires more extensive investment in housing or an onslaught of new home construction to address the mounting demand. He suggests that either institutional investors should focus on building rental properties or individuals must consider purchasing rental properties.

Additional Insights:
The modest income reported by investors is likely attributable to their age and life circumstances. As many investors are older, their income levels may reflect retirement earnings or the fact that investment properties are sometimes acquired jointly with a spouse or another party.

Furthermore, the study indicates that housing investors with two properties tend to have an equal gender split, but the proportion of male investors increases when the number of holdings reaches three or more homes.

This study by Statistics Canada provides valuable insights into Ontario's residential real estate investor profile. It highlights the importance of immigrants in driving housing investment and calls for increased attention to housing demands, whether through institutional investments or individual property purchases. As Ontario's real estate landscape continues to evolve, understanding these trends can spur informed decision-making to ensure a balanced and accessible housing market for all.