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Realtor and developer Brad Lamb – known as Toronto’s “Condo King” – says half of Toronto’s condominiums are in the hands of investors. More than double the 17 percent stated in a Canada Mortgage and Housing Corporation (CMHC) report released last week.
“You’d have to audit every developer’s transactions to really see who the buyers are. I’ve been doing this a long time in Toronto, 20-something years and the number is close to 50 percent,” said Lamb in an interview with BNN.
But is 50 percent such a bad thing? Lamb believes the massive discrepancy in the numbers is coming to the rescue of young urbanites starved for apartments and unable to buy houses.
“In Ontario we haven’t built any apartment buildings really in the last 45 years. If we aren’t building apartment buildings and people can’t afford houses, where are they going to live? The market has picked up where the purpose built housing market has left off. We build apartments that are 300 to 700 square feet for young people to live,” said Lamb.
While condos may have helped fill the gap, condo renters can get the boot at any time if the owner wants to sell.
The admittedly narrow CMHC data came from 42,426 households in the Toronto and Vancouver Census Metropolitan Area 0073, a subset of which owns a secondary condominium unit in addition to a primary residence. Foreign investors and corporate investors were not included in the numbers.
“There is a big gap in the data here where there is not a lot known about condo investors. It’s a very hard market to get at,” said Bob Dugan, chief economist at CMCH’s Market Analysis Centre, speaking to BNN.
The average price of a condo in the City of Toronto has climbed to almost $400,000, up 6.3 percent year-over-year, according to figures released by the Toronto Real Estate Board in July. It’s a trend often blamed on the mysterious foreign investor demographic.
Lamb says developers are the only ones with a clear understanding of foreign investment and it’s a segment that many realtors and buyers overestimate.
“I think if foreign buyers were 50 percent of the marketplace that would be a problem. I can assure you from doing business and having a large amount of money at stake, it’s nothing like that. It would be well below 15 percent. Well below,” said Lamb.
According to his website, he has sold over 15,000 condominiums for over $4.1 Billion since 1988.