Cory Allen, a property owner in Fredericton, New Brunswick, owns seven rental units. Despite high maintenance costs, Allen rents out some units at a loss, hoping the properties' values will rise by the time he retires. He represents a growing number of Canadian investors buying homes for future profit.
According to the Bank of Canada, investors are becoming a larger share of homebuyers, while first-time buyers are declining. Allen charges minimal rent to help tenants but acknowledges that investor activity might be pushing up home costs for buyers and renters. Economic consultant David Campbell supports this view, suggesting that more investor purchases likely elevate housing prices over time.
Allen believes landlords face high costs due to additional taxes, mortgage rates, and insurance premiums for non-owner-occupied properties. He suggests that reducing these costs could lead to lower rents. However, Allen's situation highlights a broader trend. The average home price in New Brunswick surged from $180,000 in 2019 to nearly $300,000 in 2023, partly due to high demand and investor activity.
Data from the Bank of Canada shows that investor home purchases have significantly outpaced those by first-time buyers since early 2021. Statistics Canada reported that 33% of New Brunswick's residential properties were investor-owned in 2020 and 2021.
Experts like Campbell argue for better monitoring of the housing market to understand the impact of investors. Matthew Hayes from the New Brunswick Coalition for Tenants Rights calls for rent control to curb rising rents and reduce investment appeal.
Allen argues that investment in housing is legitimate and driven by population growth and rising construction costs. He calls for policy changes to reduce landlords' costs, suggesting it could benefit both landlords and tenants.
The debate continues on whether investor activity in the housing market is a boon or a bane for New Brunswick's residents.
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