Canadians have looked to the future and roughly one in four plan to buy investment property over the next five years.
According to a new survey from Royal LePage, 11% of Canadians – approximately 4.4 million people – currently invest in residential real estate. Of that figure, 64% of residential real estate investors own one property and 32% own two or more.
The survey found 23% of Canadians who do not own a residential investment property stating they are likely to purchase one in the next five years, and more than half (51%) of current investors said they are likely to purchase an additional residential investment property within the same time period. Overall, more than a quarter of all Canadians (26%), current investors or otherwise, plan to buy an investment property before 2028.
And Canada’s real estate investors tend to be young – 44% of the investor cohort who own two or more investment properties are between 18 and 34 years old, compared to those aged 35 to 54 (29%) and those 55 or older (25%). The survey also noted that 67% of younger investors (18-34) own their primary residence, compared to 88% and 95% of investors aged 35-54 and 55 or older, respectively.
“We know that the value of home ownership is strong among Canadians – it is clear that possessing real estate remains a desirable means for building wealth over time. Many choose to invest in real estate not only as a way of generating income and reaping the benefits of value appreciation, but to provide an opening into the market for future generations of their family, ” said Phil Soper, president and CEO, Royal LePage. “Despite the hurdles of low home supply and increased lending rates, young people are more inclined than ever to make real estate investing a part of their financial planning for the future. In fact, survey results tell us that many of them are actually prioritizing an investment property over owning their primary residence.”
Curiously, 15% of residential investors do not own their primary residence – 12% of investors rent, and the majority of those are ages 18-34 – while 3% admit to living rent-free with family or friends.
“I find it interesting that a material number of investors do not own the home they themselves live in. Many of these people have likely invested in a more affordable city than the one they live in,” added Soper. “This tactic demonstrates Canadians’ deep-seated belief that real estate is a worthwhile long-term investment.”