Flip rates in Vancouver, Toronto are much less than one would expect

by Ephraim Vecina on 17 Oct 2018

Government measures aimed at curbing housing speculation will fail to improve affordability in Vancouver and Toronto, according to a new Bloomberg analysis that culled data from Teranet Inc.’s land and housing registry.

This is because flippers accounted for only a minor fraction of residential sales in Canada’s hottest residential markets, per the Teranet data.

In Vancouver, only 3.4% of condo sales between April and June this year were flipped units, compared to the 5% proportion back in March 2016. This was prior to the B.C. government implementing a 15% tax on foreign home buyers.

A significantly slower market between then and now has discouraged condo flippers, according to realtor Steve Saretsky.

“As soon as [prices] stop rising you get into a number of issues,” Saretsky told Bloomberg. “Are you really going to try to flip it in a down market? There’s no profit to be made.”

Read more: Younger home buyers feel stricter mortgage rules the most

Meanwhile, in Toronto, a mere 1.8% of total condo sales in June 2018 were those of units that have been previously sold over the past year. This was considerably lower than the 4% rate a mere two years ago in April 2016.

Flipping “has always been a very rare occurrence” in Toronto, according to RE/MAX Integra regional director (Ontario) Christopher Alexander.

“Most people buy real estate to hang onto it for at least five to seven years,” Alexander said, adding that many short-term sales are due to life-altering factors such as sudden job changes.

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