Thank you for your question.
Through you, Chair, the Canadian housing statistics program has done a number of statistical reports that have identified the number of purchasers who are in fact investors. I think the last one I saw showed that 31% of purchases in 2022 were by investors in the housing market.
I think one has to be careful in terms of framing this, in that if we want a rental market, we have to have investors, because someone has to produce the assets that tenants are living in.
That said, relative to the concerns a number a years ago that it was foreign investors who were driving up home prices, it very much has been domestic investors who have been driving up prices. This relates to the point I made in my presentation, which is that many of these are small investors. They are seeing 20% increases in home prices. They are looking at what they are getting in the equities markets and saying, “Why not just take my equity and buy another house and become a landlord?” We have seen a significant growth of small investors in the marketplace.
As I say, somebody has to own those units and rent them out, but housing has become a commodity and an investment vehicle as opposed to a home. If those investors are now crowding out individual families who want to buy a home as a home, then I think the only thing we can really do there is.... They're buying those homes because of the expectation of large capital gains. Maybe you can ask them next week, but the Bank of Canada seems to be doing a pretty good job of suppressing that particular benefit.
The other is these bags of money that I talked about that are enabling them to buy. Maybe we should consider some kind of a windfall gains tax. When properties are going up at 20% a year and landlords are putting up rents 20% a year, constraining that has to be part of the policy solution.