Business has been booming in the major condominium markets of Canada over the last decade. A 2013 survey conducted by Canada Mortgage and Housing Corporation (CMHC), however, shows that the noticeable growth in condo purchases is not only by individuals looking to move into the units themselves, but also by those aiming to invest. Whether through reselling the units at a higher price a year or so after the initial purchase or through renting out the units over the course of several years, there is money to be made off the lively condo market currently available across the country.
In the CHMC survey, it was reported that nearly one out of every five condominium owners in Toronto and Vancouver have purchased another unit to use solely for investment purposes. The brand-new 2013 Condominium Owners Survey looked at thousands of condo owners to determine the percentage of primary residents and investors. The survey showed that while 82.9 percent of condo owners use them as a primary residence, the other 17.1 percent of households surveyed are condo investors — meaning they own a separate property for use as their primary residence and they use their condo for investment purposes. Of the 17.1 percent of condo investors, 8.8 percent reportedly rent out their condo while 6.3 percent report family members living on the premises.
Of the approximately 42,000 individuals surveyed, all of them own their primary residence and about two-thirds of condo investors purchased their units with a down payment of at least 20 percent or did not require any mortgage when it was purchased. About 12 percent of these individuals claimed to have purchased their most recent condo unit with the sole intent to resell it for a greater profit within one year. Nearly 60 percent expect to keep their most recently purchased condo unit for more than five years.
So what can we take away from this survey? What's most interesting to note is the number of condominium owners there are who want to hold on to their investments by renting them out for several years, rather than reselling them relatively quickly. Sales for condos were up 94 percent this June compared to June of the previous year, and condo sales last year were 19 percent higher than the 10-year average.
Whether by investors or buyers looking for a new primary residence, it's clear that condo sales are increasing, and it's projected that they will continue to increase for the remainder of 2014 and into 2015.