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The Condo Investor Mentality

CondominiumsIf you want to know how condo investors operate, CMHC has a new report for that.

It just released its 2015 Condominium Owners Survey (COS), and it’s stuffed with facts and insights on income property activity.

One key stat, for example, is the number of condo flippers (buyers who “anticipate holding their unit for less than 2 years”). CMHC estimates the number at just 8% of all condo investors. That’s markedly less than some housing bears would have us believe (which is exactly why hard data is so important; thank you, CMHC).

Below are some of the other mortgage-related highlights.

Propensity to Finance

  • 53% of condo investors put a mortgage on their last purchased unit
    • That compares to 59% of all homeowners, per StatsCan
  • About 20% paid cash
    • Versus 11% for all homebuyers, says Mortgage Professionals Canada


Down Payments

  • 20% of investors put down less than 20%
    • Since most lenders only lend up to 80% loan-to-value on rentals, most of these investors likely chose non-prime lenders, bought in a partnership and/or just flat-out lied (i.e., told the lender they’re buying an owner-occupied or second home property, which is fraud)
  • 45% had a down payment of 20%+


Term Selection

  • Most condo investors (53%) took the faithful 5-year term
  • Interestingly, 18% took a term over five years
    • That’s almost 4 times the ratio of all homebuyers combined
    • Given how high 7- and 10-year fixed rates are, this goes to show how some investors value consistent cash flow over upfront interest savings
    • This stat is also partly explained by the fact that 60% plan to hold their investment condo more than five years
  • Just 5% took a 1-year term or less



  • 12% of investors who mortgaged their last condo chose an amortization period more than 25 years
  • 42% took a 25-year amortization
  • 31% went with less than 25 years


Rate Choice

  • 37% took a variable rate mortgage
  • 45% picked a fixed rate
    • Compare that to the general population of recent homebuyers, where 3 out of 4 chose a fixed rate
    • Investors overall are clearly more comfortable with rate risk
  • 12% chose a fixed and variable rate (i.e., a hybrid mortgage. This 12% is double the average for all Canadian homeowners.)


If you want all the details on this study, read more on CMHC’s website.

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Last modified: April 6, 2016

Robert McLister is one of Canada’s best-known mortgage experts. A mortgage columnist for The Globe and Mail, interest rate analyst and editor of MortgageLogic.news, Rob has been covering Canada's mortgage market since 2007.