Toronto real estate investors deny they're driving up the market

Peter Walsh says that since arriving in Toronto a decade ago,he and his wife have purchased three houses and two condos.

Buthe rejects the ideathat theirproperty investments are contributingtotheaffordability crisis in the city's red-hot realestate market.

"I wouldn't like to thinkof us as kind of ruining the market for anybodyor making it bad for anyone," says Walsh, who emigrated from the UK and nowworks full-time as an accountant. "I don't think I'm driving upthe market. I'm just quietlybenefitingfrom it."

His comments come amid suggestions from some real-estate observersthat domestic investors in Toronto are partially responsible for pushing upprices in a housing market with a limitedsupply, making it a challengefor first-time buyers to purchase a home.

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Figures just released bythe Toronto Real Estate Board reveal that Toronto home prices jumped 21 per cent from a year agoand now average $762,975.

That spike, some real estate observers suggest, could be related to the domestic investor market. According to one recent survey ofToronto-area real estate agents, domestic investors now make up 25 per cent of their client base.

Meanwhile, the Toronto condo research firmUrbanationsays foreign buyers made up only five per cent of the sales of new units in condo buildings that were under development between July and September. Domestic investors made up 52 per cent.

'I don't think I'm hosing anybody'

Walsh saysthe properties he and his wifehave acquired are renovated and rented out,providing housing for those who may not have an established credit history and are unable to yet afford their own home.

"What I feel we've done is perhaps help people," he says. "I can justify it tomyselfin saying I don't thinkI'm hosinganybodyor demandingexcessiverents."

For example, Walsh says one of his former tenants, an artist, wasn't able to afford the entire rent. So Walsh acceptedone of her paintings to supplement the rent owing.

JenniferGoheensays she and her husband have purchasedthree Torontocondos and a house because they realized there was more money to be made in real estatethan in thestandard type ofinvesting with abank or an investment firm.

She also disagreesthat investments like hershave had much impact on the housing market.

"I'd argue that's perhapsmore of a foreigninvestor issue. From ourperspective, it's an investment that has higher gainsthan others."

Higher gains

Another Toronto real estate investor who owns two houses and a condo, but did not want to be identified, says he also rents out his properties. He said hecan understand pointingafinger at those who buy a house, quickly renovate it, then flip it six months later.

"Not surethat argument holds with someone who purchases one and is able to maintain lower rents becausethey don'tkeep flipping it and hold on to that property for 30 years,"says the full-time medical researcher.

Before he purchases a property,he does a lot of research, visitingtheneighbourhoods, getting to know the area, which includes looking at crime maps in the city.

Hetypically purchases property inan area where he can get reliable, long-term tenants. He says he likes to keep his properties in "very good shape" and that it encouragestenants to stay longer if they get nice new floors andappliances.

"Ifthey go into disrepair, you get high turnover."

He says the property investments are an extra source of income a "solid investment" that will "support me in my latter years."

Walshsays he and his wife are also treatingtheir real estate investmentsaspension plans. He says they plan to keep investinguntil their retirement, at which time they will either sell all their propertiesor keep some for rental purposes and a steady income.