A new Statistics Canada study has shed light on the role real estate investors play in driving up housing prices across Canada. The analysis, released this week, found that investor activity is associated with higher price growth in several major markets, including Toronto and Vancouver.
Investor impact on prices
The study examined transaction-level data from 2018 to 2023, focusing on purchases by investors—defined as buyers who already own at least one property. It found that in markets with a higher share of investor purchases, prices rose more rapidly. For example, in the Toronto area, investor purchases accounted for roughly 25% of all home sales in 2023, up from 20% in 2018.
According to the report, a 1 percentage point increase in the investor share of purchases was associated with a 0.5% to 1% rise in average home prices over the following year. The effect was strongest in condominium markets, where investors are particularly active.
Regional variations
The impact varied by region. In British Columbia, investor purchases were linked to a 0.8% price increase per percentage point of investor share, while in Ontario the figure was 0.6%. In contrast, markets with fewer investors, such as Atlantic Canada, showed a weaker correlation.
Jason Mercer, chief information officer of the Toronto Regional Real Estate Board (TRREB), commented on the findings. “Investors are a significant part of the market, and their activity can amplify price trends,” he said. “Buyers are looking to take advantage of lower prices, but investor demand adds another layer of competition.”
Policy implications
The study comes amid ongoing debate over how to address housing affordability in Canada. Federal and provincial governments have introduced measures such as a foreign buyer ban and increased taxes on vacant properties, but investor activity remains a key concern.
The report notes that investors are more likely to purchase condos and smaller units, which are often the entry point for first-time buyers. As investors compete for these properties, they can push prices beyond reach for many Canadians.
Data and methodology
Statistics Canada used data from the Canadian Housing Statistics Program, which tracks property ownership and transactions. The study controlled for other factors such as interest rates, income growth, and supply constraints. The findings are considered robust, with a margin of error of plus or minus 0.2 percentage points.
The analysis also found that investor purchases are more sensitive to market conditions. During periods of price growth, investors tend to increase their activity, potentially exacerbating cycles. Conversely, during downturns, they may withdraw, softening the market.
Reactions and next steps
Housing advocates have called for further measures to curb investor influence, such as limiting the number of properties an individual can own or increasing capital gains taxes on investment properties. The Canadian Real Estate Association has urged caution, arguing that investors provide rental housing and liquidity to the market.
Statistics Canada plans to update the study annually to track trends. The agency also aims to release more granular data on investor types, including institutional investors and foreign buyers, which were not fully captured in this analysis.
