From: brewnoser2@gmail.com   
      
    . . .  Popular axiom amongst those in the real estate industries.     
      
   No, 'they're' not.  So look at the way some major real estate & development   
   firms  are re-using prime residential residential lands to expand in the   
   future to high-density real estate that will multiply their investment a   
   thousand-fold.     
      
   '20% of all home purchases in Canada by investors' is no joke.  It's a major   
   red flag.   
      
   Those who cherish their single-family neighbourhoods, particularly in prime   
   established areas, might want to be aware of who's buying the house next door   
   . . . .  or the block of houses a little further away.   
   ___________________________________   
   Globe and Mail - June 22, 2021   
      
   Investors account for a fifth of home purchases in Canada. Are they driving up   
   housing prices in a booming market?   
      
   Investors account for one-fifth of all home purchases in Canada, adding more   
   fuel to the debate about their influence on the country’s soaring real   
   estate prices and demand for housing.   
      
   Since the start of the COVID-19 pandemic, investor buying has rebounded to   
   20.1 per cent of all purchases in the country, with a slightly higher share in   
   Toronto and Hamilton, according to data published in the Bank of Canada’s   
   financial system review.    
   That is lower than during the tail end of the previous real estate boom, but   
   higher than in prepandemic days.   
      
   With the Canadian Real Estate Association (CREA) reporting the national   
   average home price is 38 per cent higher than a year ago, real estate   
   investors are being accused of driving up prices. However, housing experts and   
   economists have not been able to    
   quantify the investor effect on pricing, even though such a large volume of   
   investor buying is bound to have an impact.   
      
   “Determining the precise level at which investor activity should be a cause   
   for concern is difficult and requires further study,” Bank of Canada   
   spokesman Alex Paterson said in an e-mail.   
      
   The Bank of Canada data is a rare and incomplete look at the amount of market   
   activity driven by investors. It was disclosed in May in the bank’s latest   
   financial system review. It defines investors as borrowers who obtain a   
   mortgage to buy a property    
   while maintaining a mortgage on another property.  It does not include   
   all-cash transactions and only goes back to 2015, when the country’s real   
   estate market was already frothy.   
      
   It shows that the share of investor buying in Canada reached a high of 21.7   
   per cent in spring of 2018, before dipping just below 20 per cent in 2019.     
   The most recent reading was 20.1 per cent in February. In the Greater Toronto   
   Area and Hamilton, two    
   markets the bank has identified as exuberant, the share was 22.7 per cent in   
   February.   
      
   “When investors go into the market in a big way, they can drive up the house   
   prices,” said Aled ab Iorwerth, deputy chief economist with the federal   
   housing agency, the Canada Mortgage and Housing Corp, adding that the   
   longer-term effect is that    
   investors are often a source of financing to develop more housing and increase   
   supply.   
      
   Jean-Philippe Deschamps-Laporte, chief of the Statistics Canada’s Housing   
   Statistics Program, said investors will influence home prices. “People who   
   prefer to buy rather than rent will have to compete harder. That is a fact,”   
   he said.   
      
   Real estate investors have come under more scrutiny after news broke that a   
   Toronto condo developer is planning to buy $1-billion worth of single-family   
   homes in Canada to rent by 2026.   
      
   With the country’s rental vacancy rate below 3 per cent and an affordable   
   housing crisis raging across the country, rental homes have become coveted   
   assets for big investors who believe they can earn steady profits by   
   increasing rents.   
      
   Toronto-based Core Development Group Ltd. is the first big investor in the   
   country to establish a large-scale single-family home rental business. If Core   
   succeeds, it could entice other institutional investors, such as private   
   equity firms and pension    
   funds, to join in a big way.   
      
   So far, those investors are spending billions of dollars to own apartment   
   buildings, also known as purpose-built rentals. In the past year, there were   
   $12.9-billion worth of apartment building deals, according to data from   
   commercial real estate company    
   Avison Young. That included two private equity firms, Starlight Investments   
   and KingSett Capital, buying 27,000 apartment units and several hundred   
   short-term rental apartments across Canada for $4.9-billion last November.   
      
   Martine August, assistant professor at University of Waterloo’s school of   
   planning, said Core Development’s acquisition of rental units is low   
   compared with the total of hundreds of thousands of apartments bought by other   
   investors. However, she said    
   both types of purchases are cause for concern and part of the same process of   
   profiting at the expense of tenants.   
      
   “The business model is really about trying to drive more value for investors   
   and that comes from tenants,” said Prof. August, who researches the   
   financialization of housing – the process of turning housing into financial   
   products.   
      
   Part of what has driven investors to buy rental properties is low vacancy   
   rates and shortage of affordable housing.   
      
   Home prices have risen so quickly that cities that were once considered   
   affordable are nearing the $1-million mark. More residents, including high   
   income earners, are unable to buy and are forced to rent.   
      
   Andy Yan, housing expert and director of Simon Fraser University’s city   
   program, said investors are able to take bigger risks than home buyers who   
   intend to live in their home as the investors can tap their existing assets to   
   offer higher prices. “   
   They have a greater set of moves than homeowners. They have more financing,   
   more capital and higher risk capacities,” he said.   
      
   In Canada, it is difficult to define, quantify and measure real estate   
   investors and their effect on the market. Publicly available housing data is   
   mostly from the real estate industry.   
      
   The Canadian Housing Statistics Program, which was launched by Statscan after   
   the 2016-17 real estate boom, is trying to fill data gaps and uses information   
   from a bevy of sources, including property assessments, tax filings and census   
   data.   
      
   One of the program’s most revealing reports is from 2019 and examined   
   properties that were not “owner occupied” in three provinces. It found the   
   highest level of investor ownership in the residential area near the   
   University of B.C. in Vancouver,    
   where 47 per cent of all property types were held by investors.   
      
      
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