Approximately 11 per cent of Canadians currently invest in residential real estate, with more than half of current investors saying they are likely to purchase an additional residential investment property in the next five years, according to a survey by real estate firm Royal LePage.
The survey, conducted by Leger, said 64 per cent of residential real estate investors own one property, while 32 per cent own two or more.
“There are more small business landlords in the country than previous data would have indicated and considerably more people interested in becoming property investors,” Royal LePage chief executive Phil Soper said in an interview. “So it’s clearly a product of the time and the economic environment of the perceived opportunity.”
Since their research on real estate investors is new, there is no baseline to compare it to, but Soper said the numbers appear to be higher than he would have expected.
The report said more than a quarter, or 26 per cent, of all Canadians plan to buy an investment property before 2028, with 33 per cent of Canadians who do not own a residential investment property saying they are likely to purchase one in the next five years.
“Despite higher borrowing costs in today’s post-pandemic real estate environment, the aspiration to own property for the purpose of investment remains strong,” it said.
Investors understand that there’s a critical housing shortage in the country, and realize Canada is welcoming half a million new Canadians a year — a figure that’s likely to remain high or even grow, Soper said.
Another issue that’s driving people towards investing in real estate, he said, is that rents are at an all-time high and have leapt forward at a rate even outpacing the high level of inflation.
“The combination of supply shortage, high rents (and) more homeowners looking for rental to put a roof over their heads has attracted more people to the sector,” Soper explained.
The survey found the opportunity for their property’s value to appreciate over the long term was the top factor investors consider when buying property. Positive cash flow on a monthly basis ranked second, and the low maintenance and variable expenses was third.
Forty-four per cent of investors owned a single-family detached home, while 37 per cent invested in condominiums or apartments.
Soper said with the stock market being volatile and producing negative returns in many asset classes over the last years, investors have taken alternative investments into consideration. Young people in particular, he said, who might have been been thinking about investing in tech companies, have had a change of heart as the sector has been hit hard over the past months.
The study said the increased cost of borrowing has had a significant impact on variable-rate mortgage holders over the past year, with more than 30 per cent of investors in Canada having considered selling an investment property as a result.
Soper said that while that figure suggests there will be some churn in the pool of investors, it means the majority are not considering selling and that the sector could thus see material growth.
“Clearly, the big economic drivers at work here are leaning in favour of this particular investment class,” he said.
The study, completed online between March 2 to 17, 2023, surveyed 1,003 Canadian adults who own one or more residential investment properties. It said no margin of error can be associated with the web panel. The percentage of Canadians that owned at least one investment property, including renting out part of their home, was determined from an online survey of 10,021 respondents.
Earlier this year, data released by Statistics Canada showed that at least 20 per cent of residential real estate was owned by investors at the beginning of 2020 in each of the five provinces tracked: Nova Scotia, New Brunswick, Ontario, Manitoba and British Columbia.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
