BoC : Investors’ and repeat buyers’ share of market increasing

BoC : Investors' and repeat buyers' share of market increasing

The province of British Columbia saw a record number of new homes certified for construction last year, though new Bank of Canada data proposes that a considerable chunk was purchased by investors.

The Bank of Canada report observed credit bureau and mortgage data to calculate the percentage of Canadian homes purchased by first-time homebuyers, repeat buyers and investors.

The report revealed that investors and repeat buyers figured for an ever-increasing portion of mortgage-backed home buys. "Home purchases are being driven increasingly by existing homeowners," the report concludes.

"Within this group, investors have seen the largest gain in their share of home purchases during the COVID 19 pandemic."

Since the report evaluated mortgage data, homes that were acquired by way of cash or by corporations were not captured.

The report found that first-time home buyers made up for 47 per cent of the market as of June 1st last year, a 6 per cent decrease from the beginning of 2015.

The market's percentages of repeat buyers and investors increased. Repeat buyers made up for one third of the market as of June 2021, up from 30 per cent in January 2015. Investors made up 21 per cent, up from 18 per cent.

During the pandemic, purchases by investors have saw the most growth. Investors purchased twice as many homes in June of last year as they did in June 2020 - a 100 per cent increase.

Over the same period, repeat buyers increased by 66 per cent and first time buyers by 47 per cent.

"Registered new homes data is collected at the beginning of a project, before building permits are issued, making it a leading indicator of housing activity in B.C.," the province explained in a news release.

BC Housing numbers show 53,189 new homes were registered last year, a 67 per cent increase from 2020.

"This report shows that we can meet the challenge to increase the supply of desperately needed rental homes for individuals, families and seniors in B.C., if cities partner with us to get building permits issued quickly for these registered units," stated David Eby, B.C.'s Attorney General and Minister Responsible for Housing, in the province's release.

"The numbers show that together we can respond to the more than 25,000 new people who moved to British Columbia in the last three months looking for homes, and the thousands more who we know are still coming," Eby added. "We can only succeed in this major challenge if we have committed partners in cities, the federal government, non-profits, First Nations and the private sector to get these registered homes built and open."