10 Interesting Traits of Condo Investors in Toronto and Vancouver

The Canada Mortgage and Housing Corporation (CMHC) has released the results of its 2014 Condominium Owners Survey (COS), outlining the buyer profile of condo owners and investors in Toronto and Vancouver.

42,191 households in Toronto and Vancouver were surveyed, with 83.8% saying that they owned a condo as their primary residence, and 16.2% stating they owned a condo as their primary residence and have at least one secondary condo unit. The latter of these two groups are referred to as COS Investors throughout CMHC’s report. Further, COS Investors does NOT include households that only own one condo and reside in it or households with a secondary unit but rent out their primary residence. The survey also excludes data on foreign investors, corporate investors, and Canadians who own condos in Toronto and Vancouver but don't live in either CMA.

Highlights of the COS

• “The results illustrate that most COS investors own few units. In fact, nearly three-quarters of COS investors own only one secondary unit, while 10% own three or more secondary units,’’ says Dana Senagama, CMHC Principal Market Analyst for Toronto. “And 90% don’t anticipate purchasing more units within the next year.’’
• Just over half of the COS Investors stated that they purchased their secondary condo unit to generate rental income.
• Only 55% expect their secondary units to increase in value over the next year.
• 44% said that their latest secondary unit was either vacant, under construction, or occupied by them or a family member. So, nearly half didn’t buy preconstruction.
• “Our results show that most COS investors are in the market for the long term and expect to keep their last purchased secondary unit for more than five years,” says Robyn Adamache, CMHC Principal Market Analyst for Vancouver. “Many have had their last unit for six years or longer.”
• More than 45% do not have a mortgage on their latest secondary unit. Those without a mortgage had a higher incidence of their secondary unit not being rented out at the time of purchase.
• COS Investors in Toronto were more likely to purchase a new condo unit during a presale, compared to Vancouver. Toronto COS Investors were also more likely to purchase additional secondary units within the next year.
• 64% of Investors in Toronto expected their secondary unit to increase in value over the next year, while only 41% of Vancouver Investors thought the same.
• A much smaller percentage of COS investors (23%) have owned their units for more than 10 years, compared to condo owners (45.4%).
• Only 18.8% of COS investors had no mortgage at origination, whereas 28.3% of owners did not have a mortgage. But, 45.3% of investors were able to put forward a down payment of 20% or more, whereas only 31% of owners were able to do so.

Minto Yorkville Park Condo sales event

So, if you’re looking to invest in a secondary condo unit in Toronto or Vancouver, it looks like it’s common practice to hold onto it for more than five years before selling, but no longer than 10. Do you think CMHC’s COS is an accurate profile of Toronto and Vancouver condo owners and investors?