Statistics Canada’s new dataset tracking investor ownership of residential real estate is offering additional insight into the country’s housing market, but what it means for policy may be trickier to determine.

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Investors own a big chunk of Canada's housing market. Should we be worried? Back to video

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The data, published by the Canadian Housing Statistics Program (CHSP) for the first time on Feb. 3, 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.

The share of investor ownership ranged from 20.2 per cent in Ontario to 31.5 per cent in Nova Scotia. In Ontario, 41.9 per cent of condominium apartments were owned as investments, the highest rate nationwide.

While some critics argue investors are crowding out families and driving up prices, others market watchers say investment is crucial to accelerate much-needed construction, given the country’s acute shortage of housing stock.

“There’s the two possibilities but we are not commenting on whether it is good or bad,” Statistics Canada’s Joanie Fontaine said in an interview. “It helps on one way and can hurt them the other way.”

Fontaine and fellow senior analyst Joshua Gordon, who co-wrote the report, said investors who rent out their properties help boost “really low” rental housing supply but that, on the other hand, they removes units for potential buyers who intend to use them as their primary place of residence.

Jordon Scrinko, chief executive and co-founder of Precondo.ca, an online catalogue of pre-construction units across the Greater Toronto Area, said having investors is especially important in pre-construction.

Purpose-built rentals in Toronto have started to trend up again after a long time of scarcity, he said, adding that the pick-up over the last years has been “good to see.”

“If (investors) weren’t buying the pre-construction condos, then developers would not hit the sales thresholds required by the bank in order for them to actually secure construction financing and so that new housing supply wouldn’t get built at all,” Scrinko said.

In an interview with the Financial Post in January, Bob Dugan, chief economist at the Canada Mortgage and Housing Corporation (CMHC) also pointed to the importance of investment, noting that trying to improve housing affordability through policies such as rent control could backfire by lowering returns and turning off investors.

“We have to think very carefully about this because we need the investment to increase supply,” Dugan said.

Robert Hogue, assistant chief economist at RBC Economics, said while the new data could help policymakers assess Canada’s housing market, it would not be enough to tell whether the proportion of investors among real estate owners is “too much” or “not enough” without further information.

Over time, as Statistics Canada continues to document and quantify this data, Canadians would be able to compare whether different areas with a higher rate of investors have an impact on housing prices and costs, including rent, he said.

“What we got is a first batch of very significant data that we’ll use in the years ahead,” Hogue added, also noting that it is already lagging the market.

“The Bank of Canada, not long ago, showed some numbers (indicating) that new investors held an increasing share of sales, so my guess is that probably will have boosted since,” Hogue said, although he noted that this is tougher to tell for the more recent periods because rate hikes over the past months have been driving away not only investors, but also first-time homebuyers.

“It’s unclear going forward what the share will be,” he said.

The five provinces studied by StatsCan were British Columbia, Manitoba, Ontario, New Brunswick and Nova Scotia. The agency is hoping to add the remaining provinces soon.

• Email: dpaglinawan@postmedia.com | Twitter: denisepglnwn