Investors gobble up homes in Canada’s hot real estate market

The fastest-accumulating people in Canada’s scorching housing market already own one home – or in some cases three or four.

In the 12 months to June, the number of people who took out a fourth or more mortgages rose 7.7%, more than doubling the increase for first-time borrowers, according to data from the consumer credit reporting company Equifax Canada Inc.

The Canadian housing market has been about as dynamic as the world. And while people with more than one home loan make up only about 16% of the mortgage market, these borrowers’ purchases have accelerated rapidly. This is because rising house prices and falling mortgage rates have increased their ability to borrow on one property to buy a new one.

“There is a population that is taking advantage of the current state of the housing market to use it as an investment for their retirement instead of traditional routes,” said Rebecca Oakes, associate vice president of advanced analytics at Equifax. “There is a marked growth in the number of people with multiple mortgages. ”

The boom in investor activity has raised concerns about affordability as many potential buyers have been shut out of the market. The trend presents a challenge for Prime Minister Justin Trudeau, who has made helping first-time buyers a centerpiece of the election campaign that brought him back to power in last week’s federal election.

The last time Canada saw a similar increase in the number of people owning multiple properties was in 2017, the data shows. At that time, the rapid appreciation in house prices in Toronto and Vancouver prompted authorities to crack down on fears of a bubble.

While some of the measures Trudeau promised could help level the playing field between investors and first-time buyers – they include a new loan program, tax credits, and lower mortgage insurance costs – they won’t be enough. may not yet have to overcome the advantages held by the existing owners.

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