B.C. we have seen a record number of new homes registered for construction in 2021, but data from the Bank of Canada suggests that a large portion of them may be purchased by investors.
A study by Bank of Canada looked at mortgage and credit bureaux data to determine the percentage of homes in the country purchased by first-time home buyers, repetitive buyers and investors.
It concludes that investors and repetitive buyers make up a significant portion of the mortgage-backed mortgage-funded housing program in Canada.
“The purchase of housing is largely driven by existing homeowners,” the study authors wrote in their conclusion.
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“In this group, investors have seen huge profits from their home purchases during the COVID 19 violence.”
Because the study looked at mortgage data, it does not take homes bought for cash or by companies, according to the authors.
The study found that first-time buyers made up 47 percent of the market since June 1, 2021, down from 53 percent in early 2015.
At the same time, the percentage of repetitive buyers and investors in the market has both risen. In this study, “repeat buyers” are those who buy a new home and sell an old one, while “investors” are those who buy a new home and hold on to the old one, often with the intention of renting one of them. properties as a source of income.
Repetitive buyers accounted for 33 percent of the market since June 2021, up from 30 percent in January 2015, and investors made up 21 percent of the market, up from 18 percent.
During the COVID-19 violence, as real estate prices and prices skyrocketed, investment by investors increased sharply. Investors bought double the number of homes in June 2021 as they did in June 2020, which is a 100 percent increase in the purchase price.
For repeat buyers, the simultaneous increase was 66 percent, while for consumer purchases for the first time it increased by 47 percent.
A study by the Bank of Canada was published in the same week B.C. the government has made a record number of new home registrations by 2021.
“Registered new housing details are collected at the beginning of the project, prior to the issuance of building permits, making it a leading indicator of housing development in B.C.,” the state said in a press release.
The latest figures from BC Housing show 53,189 new homes registered in B.C. in 2021. That is a 67.5 percent increase from 2020 and the highest annual number since the provincial housing authorities began collecting details of new housing registrations in 2002.
The total includes 12,899 construction target employment, which is 47.7 percent growth over the previous year.
“This report shows that we can meet the challenge of increasing the provision of much-needed rental housing for individuals, families and the elderly in BC, if cities partner with us to issue immediate building permits for these registered properties,” said David Eby, BC Attorney General and Minister of Housing , on the liberation of the province.
“The numbers show that we can all respond to the more than 25,000 young people who have moved to British Columbia in the past three months in search of homes, as well as the thousands we know are still coming,” Eby said. “We can only succeed in this great challenge if we commit ourselves to our urban partners, the coalition government, non-profit organizations, First Nations and the private sector to make these registered houses built and open.”
Most of the newly registered homes are not for rent, however, and Bank of Canada data suggests that a large number of them will be purchased by investors, as the BC real estate market continues to grow inaccessible to many potential buyers. – time buyers.
In an interview earlier this month, UBC director of urban economics and retail Thomas Davidoff told CTV News the current situation is benefiting people who are already property owners, rather than those who are trying to enter the market.
“If we continue to have a very low interest rate and high rental growth, yes I think it will be even harder for people to accumulate lower wages and be able to pay off mortgage debt over the course of their working life,” said Davidoff. it said.
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