February 10, 2017
New Census Data Casts Doubt on Real Estate Investment Numbers
Fresh facts were released this week from the most recent (and long-awaited) long-form national census, and they come with new insights into the housing market – specifically, the number of residents who claim their homes are standing empty.
New dwellings data sets tally the number of homes left vacant or not used as a primary residence, and may be the most concrete look we’ve had so far into the extend of real estate speculation in Canada; both foreign and domestic investors have received blame for driving prices and diminishing affordable housing supply.
Thousands of Empty Homes in Vancouver
Once again, Metro Vancouver ranks the highest for the percentage of empty homes (based on population); with 25,502 reported as less than fully occupied. That’s a 15% increase from 2011, and accounts for a full 6.5% of housing stock.
In terms of specific municipalities, the City of Vancouver actually ranks second to Edmonton’s percentage of 6.6%. It should be noted, though, that the latter has a much smaller population and that a good chunk of its oil-industry-related workforce is transient or seasonal. According to Better Dwelling, the neighbourhoods with the most unoccupied homes are Coal Harbour, Marine Gateway, and Joyce-Collingwood.
Under-utilized housing has long been a pain point in the west coast city; in November 2016, City Council passed an “empty homes tax”, the first of its kind in Canada. Homes that are not used as primary residences for at least six months of the year will be subjected to a 1% tax on their total value (upwards of $10,000 for real estate regularly priced in the millions). Those who try to shirk their tax duty or misrepresent their home’s status could face steep penalties of that much per day. Vancouver Mayor Gregor Robertson hopes the measure will return 1,500 to 4,200 units back to the rental market, and will alleviate rental vacancies from 0.6% to 3.5%.
Surprising Stats for Toronto
If you think Vancouver’s empty house issue is bad, brace yourself – Toronto has that trumped by over 70,000 units. Yes, you read that right – a reported 99,236 units are sitting vacant in the Big Smoke, accounting for 4.5% of the city’s housing stock (again, Better Dwelling has mapped the hot spots).
It will be interesting to see if these numbers renew calls for more measures taken against real estate investors in Toronto, similar to the 15% foreign buyer tax implemented in Vancouver. In the Toronto Real Estate Board’s recent Market Year in Review and Outlook Report 2017, foreign investors account for just 4.9% of purchases, with 40% claiming their properties are used as principal residences. TREB stated that given their findings, taking measures to cool investor activity would be a “misguided” move, and have negative implications for immigration, GTA housing affordability, and the rental market.
Investors Aren’t the Problem: OREA
The Census also highlights population growth across the nation, finding it has boomed by 5% (1.7 million people) since 2011. That growth occurring near markets with limited housing options has promoted Ontario Real Estate Association CEO Tim Hudak to call for more policy to improve supply, rather than limit buyers.
“Population growth is rapidly increasing in cities where we are also seeing some of the lowest levels of inventory in history. Realtors and builders in this province have been saying that new homes and resale listings cannot keep up with the demand in the market,” he stated on OREA’s site. “Population growth is not the problem here – the lack of housing availability is the problem; and if it is not fixed soon, we could have a severe affordability crisis on our hands.”