The enduring myth of the house flipper, whose impact on housing affordability has been overestimated

House flipping—buying homes to renovate and quickly resell for profit—has long been blamed for driving up housing prices in Canada. However, recent studies suggest that its impact on housing affordability may be less significant than commonly believed.

Data indicates that house flipping constitutes a small fraction of real estate transactions nationwide. For instance, in 2020, investors owned about 21% of all housing in Toronto and 33% in Vancouver, with only a portion of these being short-term flips.

Experts argue that other factors, such as limited housing supply and increased demand from various buyer groups, play a more substantial role in escalating home prices. A 2024 analysis found that investors were increasingly crowding out prospective first-time buyers, indicating a broader trend beyond just flipping.

Government policies targeting house flipping, like higher taxes on short-term property sales, aim to improve affordability. However, these measures may have limited effectiveness if they don't address the underlying supply and demand issues.

To tackle housing affordability, experts recommend focusing on increasing the overall housing supply and implementing policies that support first-time buyers. Addressing the broader market dynamics is essential for creating a more accessible housing market for Canadians.

In conclusion, while house flipping contributes to housing market dynamics, its effect on affordability appears to be overestimated. A comprehensive approach that considers all influencing factors is necessary to effectively address housing affordability challenges in Canada.