Who is the typical property investor?



A new report highlights the details of the demographics of property investors in Ontario, Canada. It is often assumed that most property investors are wealthy corporations with many properties in their portfolio. The truth is surprisingly different from stereotypes. Here is who really invests in property.


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Demographics

The majority of multi-homeowners are couples. Not companies, and not individuals. Since 2011, around 60% of homes purchased by multi-homeowners were purchased by parties of two. While 30% of those homes were purchased by individuals, this number is on the decline. This trend is probably a reflection of the housing unaffordability in Ontario and the need for dual incomes to afford an investment property.


Number of properties

As of July 31, 2022, here are how many properties multi-homeowners have purchased:


  • 53% own two properties

  • 18% own three properties

  • 8% own four properties

  • 21% own 5 or more properties


Of the majority who own only two properties, 25% bought homes in the greater Toronto area that are not condos. This trend is contrary to popular belief in Toronto, where it is commonly believed that condos are more often owned by investors.


Location

21% bought properties outside of the real estate “hotbeds” of the GTA, Ottawa, University towns, and cottage country. Over the course of COVID, many people looked for properties outside of the metropolitan areas. Even today, with the proliferation of remote working, property investment in the suburbs and beyond is considered a good investment.


Lenders

Researchers conducting the survey noticed a trend that the larger the portfolio of an investor, the more likely it is they’ll use a variety of lenders to fund their property purchases. Approximately 70% of owners with 5 properties or more use more than one lender.


They also observed that the more properties purchased, there was less reliance on a Big-5 bank. Around 54% of owners who have two homes in their portfolio rely on Big-5 banks for financing, with this number dropping to 38% of owners with five or more homes relying on Big-5 banks for lending.


Wealth status

Only 4% of residential properties in Ontario are owned by corporations. The London area is the most popular among corporations that own multiple properties; 73% of said owners have ten or more properties in their portfolio. This illustrates a trend of homeownership for income-generating purposes.


This trend is a growing one; if you are interested in real estate investment, visit https://www.regalwayhomes.com/bookings-checkout/real-estate-investment?referral=service_list_widget to book an appointment with an advisor today!


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