Housing supply has been a hot topic as of late, with Toronto currently exploring the implementation of a vacant home tax in order to boost available rental and for-sale inventory. A new survey published today by Royal LePage takes a deeper look at who owns multiple properties and why in Canada’s three largest urban communities.
The online Leger survey, which was conducted between June 4th and 13th, gathered responses from 1,500 Canadian homeowners in the Greater Montreal Area (GMA), the Greater Toronto Area (GTA) and Greater Vancouver (GV).
According to the survey results, more than ten percent of Canadians from these regions currently own more than one property. Fourteen percent of Greater Vancouver homeowners had more than one home, followed by the GTA at 13 percent and the GMA at 12 percent.
When it comes to the use of their secondary properties, about two-thirds of homeowners in GV and the GTA said that they were collecting rental income, if only some of the time, at 65 percent and 64 percent, respectively. In the GMA, this number dropped significantly to 35 percent.
“While some secondary properties are used for recreational purposes, many of these homes are foundational to Canada’s critical supply of rental housing,” said Phil Soper, president and CEO of Royal LePage, in the report.
“Entrepreneurial landlords supply housing to the thirty per cent of Canadians who rent, be they new immigrants, students, young people entering the labour force, or those who cannot or choose not to own their home,” he added.
In the GTA, 49 percent of the secondary property owners polled said they are using the unit primarily as a rental property, while 27 percent said that they are not collecting any rental income. Similarly, 51 percent of secondary homeowners in GV said that they used their unit solely for rental purposes, and 27 percent were not accruing any income from it.
By comparison, just a quarter (25 percent) of secondary property owners in the GMA said that they were using their property primarily as a rental, and 37 percent said they were not gaining any rental income.
Four percent of respondents in the GMA said their secondary properties are currently vacant, compared to seven percent of those in the GTA and GV. Nine percent, 15 percent and 13 percent of homeowners in each city confirmed that they were using and renting out the property some of the time.
“Among secondary property owners in Montreal, the majority are using the properties for leisure, like recreational purposes, rather than as an investment,” said Roseline Guèvremont, a real estate broker with Royal LePage Tendance, in the survey’s findings.
“In Toronto and Vancouver, where prices have been soaring for several years, homeowners have been taking advantage of the significant equity in their primary residences in order to purchase a secondary property, and renting it out at least part of the time as an investment,” she explained.
Although homeownership remains out of reach for many younger buyers, a chunk of the under-35 demographic are secondary property owners in each of the three respective markets analyzed. In the GTA, 18 percent of homeowners aged 18 to 35 years old own more than one property, while 16 percent and 14 percent of the same age group are multi-property owners in the GMA and GV.
Eleven percent of homeowners over the age of 35 in both the GTA and GMA own more than one property, while this number rises to 14 percent in GV.
“Young people today put a lot of emphasis on work-life balance. They want their money to work for them, and they recognize that investing in real estate has the potential for great returns,” said Caroline Baile, a real estate broker with Royal LePage Sussex, in the report.
“While so many young Canadians struggle to enter the real estate market, those fortunate enough to do so, whether on their own or with financial support from their parents, will reap the benefits in the future,” she added.
