Shaun Hildebrand (Urbanation) and Benjamin Tal (CIBC) published a report today called, “A Window Into the World of Condo Investors.” In it they revealed that last year (2017 data) no less than 48% of the Greater Toronto Area’s newly completed condo units were closed on by “rental investors.” In other words, almost half of the units became new rental supply.
This stat was not surprisingly turned into clickbait-y type headlines like, “Half of Toronto condos bought last year were by investors”; whereas an alternate headline might read: “Half of Toronto condos completed last year became new rental housing.” Not as jarring, I know.
In any event, there are a bunch of other interesting stats in the reports. Here are a few of them:
- 80% of all new home sales in the GTA last year were condo.
- Average resale condo prices (per square foot) increased by 26% last year and rents grew by 9%.
- Over 20% of condo investors purchased their property with no mortgage.
- Average down payment made by investors was 20%; non-investors were closer to 15%, likely because of mortgage insurance and other factors.
- Out of the condo investors who took possession in 2017 with a mortgage, no less than 44% are in a negative cash flow position – meaning their rental income isn’t covering their carrying costs.
- The returns, which the report calls exceptional, have been coming in the form of price appreciation.
- As a stress test for the market – what if all these negative cash flow investors suddenly sold their condos? – the report also estimates that if you took all of the rental investors who closed in 2017 with a mortgage and who are in a negative cash flow position greater than $500 per month, it would represent only 3.4% of the total annual supply of condos (both new and resale product).
If you would like to check out the full report, you can do that over here.
Photo by Scott Webb on Unsplash
According to newly released US census data for 2010-2017 – which Brookings analyzed here – the “back to the city” movement appears to have peaked in 2012. (This is something that we’ve looked at before on the blog.)
Here is a graph from Brookings showing the annual growth rate for urban and suburban counties. Note how growth in the “urban core” peaked in 2012 and how growth in both the “emerging suburb” and “exurb” have increased since then.
There were some big announcements in the planning world this past week here in the Greater Toronto Area. Gregg Lintern (follow him on Twitter) was named the new chief planner of Toronto (he was previously the acting chief planner following Jennifer Keesmaat’s departure) and Andrew Whittemore (couldn’t find him on Twitter) was named the new chief planner of Mississauga.
As I went through the articles announcing the above appointments, I couldn’t help but be reminded that this region is at an exciting and pivotal moment in its history. All of the talk is about improving urban mobility (i.e. becoming less dependent on cars); intensifying around transit stations (as well as gently intensifying neighborhoods); making downtown a better place for families; and so on.
It can be easy to feel defeated in this big bad world of city making. Oftentimes things seem to get reduced to either urban vs. suburban rhetoric or, as if nothing else matters, this one simple question: “But, how tall is the building?” So its nice to know that those at the helm continue to see endless opportunity in this region. I know that I wouldn’t want to be doing what I’m doing anywhere else.
Photo by mwangi gatheca on Unsplash
Shaun Hildebrand (Urbanation) and Benjamin Tal (CIBC) published a report today called, “A Window Into the World of Condo Investors.” In it they revealed that last year (2017 data) no less than 48% of the Greater Toronto Area’s newly completed condo units were closed on by “rental investors.” In other words, almost half of the units became new rental supply.
This stat was not surprisingly turned into clickbait-y type headlines like, “Half of Toronto condos bought last year were by investors”; whereas an alternate headline might read: “Half of Toronto condos completed last year became new rental housing.” Not as jarring, I know.
In any event, there are a bunch of other interesting stats in the reports. Here are a few of them:
- 80% of all new home sales in the GTA last year were condo.
- Average resale condo prices (per square foot) increased by 26% last year and rents grew by 9%.
- Over 20% of condo investors purchased their property with no mortgage.
- Average down payment made by investors was 20%; non-investors were closer to 15%, likely because of mortgage insurance and other factors.
- Out of the condo investors who took possession in 2017 with a mortgage, no less than 44% are in a negative cash flow position – meaning their rental income isn’t covering their carrying costs.
- The returns, which the report calls exceptional, have been coming in the form of price appreciation.
- As a stress test for the market – what if all these negative cash flow investors suddenly sold their condos? – the report also estimates that if you took all of the rental investors who closed in 2017 with a mortgage and who are in a negative cash flow position greater than $500 per month, it would represent only 3.4% of the total annual supply of condos (both new and resale product).
If you would like to check out the full report, you can do that over here.
Photo by Scott Webb on Unsplash
According to newly released US census data for 2010-2017 – which Brookings analyzed here – the “back to the city” movement appears to have peaked in 2012. (This is something that we’ve looked at before on the blog.)
Here is a graph from Brookings showing the annual growth rate for urban and suburban counties. Note how growth in the “urban core” peaked in 2012 and how growth in both the “emerging suburb” and “exurb” have increased since then.
There were some big announcements in the planning world this past week here in the Greater Toronto Area. Gregg Lintern (follow him on Twitter) was named the new chief planner of Toronto (he was previously the acting chief planner following Jennifer Keesmaat’s departure) and Andrew Whittemore (couldn’t find him on Twitter) was named the new chief planner of Mississauga.
As I went through the articles announcing the above appointments, I couldn’t help but be reminded that this region is at an exciting and pivotal moment in its history. All of the talk is about improving urban mobility (i.e. becoming less dependent on cars); intensifying around transit stations (as well as gently intensifying neighborhoods); making downtown a better place for families; and so on.
It can be easy to feel defeated in this big bad world of city making. Oftentimes things seem to get reduced to either urban vs. suburban rhetoric or, as if nothing else matters, this one simple question: “But, how tall is the building?” So its nice to know that those at the helm continue to see endless opportunity in this region. I know that I wouldn’t want to be doing what I’m doing anywhere else.
Photo by mwangi gatheca on Unsplash
The other finings from Brookings are that growth has slowed in large metropolitan areas (small metro areas and non metro areas, on the other hand are up) and that people are continuing to move from the Snow Belt to the Sun Belt.
If you look at population gains and losses from 2016-2017 for the 100 largest US metro areas, the only Snow Belt gainers within the top 20 are New York (15th), Columbus (19th), and Boston (20th). Dallas, a Sun Belt city, was first with a gain of 146,000 people.
So what’s going on? The narrative is that soon as the US economy and housing market recovered from the Great Recession of 2008, the trend lines simply reverted back to business as usual: sun and sprawl.
The other finings from Brookings are that growth has slowed in large metropolitan areas (small metro areas and non metro areas, on the other hand are up) and that people are continuing to move from the Snow Belt to the Sun Belt.
If you look at population gains and losses from 2016-2017 for the 100 largest US metro areas, the only Snow Belt gainers within the top 20 are New York (15th), Columbus (19th), and Boston (20th). Dallas, a Sun Belt city, was first with a gain of 146,000 people.
So what’s going on? The narrative is that soon as the US economy and housing market recovered from the Great Recession of 2008, the trend lines simply reverted back to business as usual: sun and sprawl.
Share Dialog
Share Dialog
Share Dialog
Share Dialog
Share Dialog
Share Dialog