merged credit bureau data from Transunion of Canada Inc. with that published by federally regulated financial institutions. In the report, homebuyers were categorised as First Time Homebuyers (FTHBs), repeat homebuyers and investors. Repeat homebuyers include those whose new mortgage issuance coincided with the discharge of an older mortgage, while investors are those who have multiple mortgages issued to them.
Accordingly, between 2014 and the first half of 2021, FTHBs acquired one of every two homes sold, making them the largest cohort of homebuyers. Meanwhile, repeat homebuyers accounted for 31 per cent of purchases and investors purchased a little less than one in five mortgaged dwellings.
With investors accounting for 19.1 per cent of residential purchases, it cannot be denied that they represent a large market segment, and the Bank of Canada warns that they are “exacerbating the boom-bust cycles”. However, But the unknown unknowns in the data leads to the question, how the Bank of Canada identifies investors.
For instance, some experts point to the fact that holding multiple residential mortgages does not necessarily make one an investor. According to an industry veteran Will Dunning, for all we know, some of these multiple mortgage holders were parents who were helping their children with their first home purchase by signing on their mortgages.
Nevertheless, the annual growth in new mortgages was quite similar for all three market segments until the third quarter of 2020. Thereafter purchases by investors and repeat homebuyers increased faster than those for FTHBs.
