Are Corporations Really Buying Up Homes in Canada?

The idea of large corporations buying up Canadian homes, making them inaccessible to regular families has become a hot topic in recent years. Depuity Prime Minsiter Christia Freeland announced on November 29, 2024 that the government is cracking down on large, corporate investors who buy up single-family homes.

But how significant is this phenomenon, and what impact is it truly having on housing affordability? To answer these questions, we need to examine the available data, government actions, and industry trends.

What’s Behind the Concern?

The federal government has raised alarms over the potential “financialization” of housing—a trend where homes are treated as speculative assets rather than places to live. On November 19, 2024, Deputy Prime Minister Chrystia Freeland announced consultations aimed at restricting large corporate investors from purchasing single-family homes. The goal is to create a fairer housing market where everyday Canadians aren’t outbid by well-funded corporations.

However, the scale of corporate investment in Canadian housing—and its actual impact on affordability—remains a subject of debate.

The U.S. Comparison: Is Canada Following a Similar Trend?

In the United States, corporate ownership of single-family homes is a well-documented issue. Following the 2007 housing crash, institutional investors like Blackstone and Tricon Capital began acquiring thousands of foreclosed homes, turning them into rentals. Today, such companies own significant portions of the housing market, with institutional investors accounting for one in four homes sold in the U.S.

Naturally, this has sparked concerns and has triggered petitions for the federal government. A volunteer group, spearheaded by Hossein Maleki, president and CEO of Satel Creative, has launched a petition aimed at halting investment companies from purchasing single-family homes—a growing concern for the group.

By contrast, corporate ownership of single-family homes in Canada is far less prevalent. Analysts suggest the trend is “in its infancy” here, with only one notable company—Core Development Group Ltd.—owning around 550 single-family homes in Ontario. One X user suggests “There are no large corporations buying existing single-family houses in Canada simply because the math doesn’t work. This is a US Phenomenon only”

‍

Corporations buying up Canadian homes isn't necessarily new to November 2024, similar reports came out earlier this year, sparking debate from both sides. Here's a Reddit post from r/TorontoRealEstate from April 2024, voicing a similar opinion that it's not happening at scale like in the United States.

‍

Lack of Data: The Mystery of Corporate Ownership in Canada

One major challenge in addressing this issue is the lack of reliable data on corporate ownership of housing in Canada. Unlike the United States, where institutional investors' market share is well-documented, Canadian agencies like Statistics Canada and the Canada Mortgage and Housing Corporation (CMHC) do not track this information comprehensively.

This lack of transparency has led to speculation and concern:

• Statistics Canada admits it does not publish information on institutional investors or the types of residential properties they own.
• CMHC similarly states it does not collect data on corporate ownership of homes.

Without clear numbers, it’s difficult to assess how much corporate buying influences housing affordability in Canada. The lack of transparency comes from the inability to distinguish "Investors" such as individuals from "corporations" doing the investing.

Corporate Activity in the Market: Spotlight on Tricon Capital

While corporate ownership of single-family homes in Canada is limited, one company that has drawn attention is Tricon Capital, a Toronto-based firm that manages tens of thousands of rental properties.

Tricon’s U.S. Dominance

Tricon is infamous in the U.S., where it owns approximately 38,000 single-family homes, mostly concentrated in the Sun Belt region. The company’s business model involves acquiring homes, turning them into rentals, and marketing them to millennials as “turnkey” housing options.

Canadian Activity

Tricon has also made headlines in Canada, where it received federal support for a Toronto rental project worth $444 million. Critics argue that government funds are being funneled into companies that already have significant resources, raising questions about the role of corporate entities in Canada’s housing market.

The Federal Government’s Response

In its consultation on restricting corporate purchases of single-family homes, the federal government has outlined several questions for stakeholders and the public:

• Are large corporate investors contributing to harmful financialization of housing?
• How can policies distinguish between “good” investments (e.g., building new homes) and “bad” investments (e.g., speculative buying of existing homes)?
• What tools could deter harmful investment activities without stifling homebuilding?

While these consultations mark an important step, critics note that the government’s focus is limited to single-family homes, ignoring the impact of corporate ownership of condos and rental buildings.

Is Corporate Buying the Root Cause of Canada’s Housing Crisis?

Financialization of Housing

The concept of financialization refers to treating housing as an asset class rather than a necessity. While this trend is evident in Canada, corporate investors represent a small fraction of property owners compared to individual investors.

For example:

• Statistics Canada reports that 29% of residences in British Columbia, 41% in Nova Scotia, and 31% in Ontario are owned by individuals with more than one property. These figures likely include “mom-and-pop” landlords as well as larger investors.
• Corporate ownership, by comparison, is relatively small and geographically concentrated.

Taxation and Bureaucracy

Experts argue that other factors, such as high taxes and regulatory red tape, are more significant drivers of housing unaffordability. For instance, 31% of the cost of a new home in the GTA comes from government-imposed charges, making construction more expensive and limiting supply.

The Future of Corporate Ownership in Canada

Corporate buying may not be widespread in Canada yet, but the potential for growth exists. If the U.S. experience is any indication, institutional investors could expand their footprint in Canada, especially as housing becomes increasingly unaffordable for individual buyers.

However, government actions like the proposed restrictions on corporate purchases and consultations on the financialization of housing could help curb this trend before it becomes a larger issue.

Conclusion: What Should Be Done?

While corporations are not the primary drivers of Canada’s housing crisis, their presence in the market is worth monitoring. The federal government’s move to restrict corporate purchases of single-family homes could help ensure a level playing field for buyers. However, more transparency and data collection are crucial for understanding the scale and impact of corporate ownership in Canada.

To truly address the housing crisis, policymakers must also focus on:

1. Encouraging new construction by reducing taxes and red tape.
2. Improving affordability through targeted financial relief for buyers.
3. Expanding data collection to track corporate and institutional ownership of homes.

By tackling these broader issues, Canada can ensure that housing remains a place to live—not just a speculative asset.