(BLOOMBERG) – In Canada, a home is no longer just a home – it is an investment.

The country now has one of the world’s hottest real estate markets and its residents are snapping up more homes than they can ever live in.

Take Mr Brady McDonald, who owns more than 100 houses.

“My net worth has obviously gone up a lot, just based on what’s happened this year, because the market’s gone berserk,” said the former arborist who started acquiring single-family homes in the small city of Barrie, Ontario, in 2015, and now says he has a net worth “in the millions”.

“We have a housing crisis here,” he said from Barrie, where prices have gone up almost 40 per cent in the last year. “The demand for housing is not going down. So there’s always opportunity.”

But in a country that faces one of the world’s most acute housing shortages, investors like him are coming under increased scrutiny. Concern is growing that the professionals are crowding out first-time buyers and would be quick to sell if property values start to slide, which could threaten the economy.

Investors account for about a fifth of new mortgages in Canada – the same share that prompted a crackdown in Britain, and roughly five times the rate in the United States – stoking debate over whether homes should be viewed as assets, or just places to live in.

“The moment we want houses to be good investments is the moment we want prices to grow faster than local economies and local earnings,” said Professor Paul Kershaw of the University of British Columbia and founder of Generation Squeeze, a group that advocates for issues important to young people, including accessibly priced housing. “That’s a recipe for unaffordability.”

But generations of Canadians have been raised to believe that owning a home is the surest way to financial security – at almost 70 per cent, the country’s home ownership rate is above those of many peer nations. There is also the widespread conviction that a single-family detached house is the best place to raise a family.

While there is no doubt competition for houses in Canada is intense – bidding wars resulting in deals for six figures over asking have become routine – policymakers so far have given no indication they plan to impose curbs on domestic investors.

“Determining the precise level at which investor activity should be a cause for concern is difficult and requires further study,” the Bank of Canada said in an e-mailed statement, adding that its researchers plan to publish further analysis later this year.

But it also said that investors contribute to a healthy housing market by increasing options for renters.

For example, Mr McDonald would renovate his purchases to add extra units, turning a property built for one family into space for two or three, which also maximises his income.

He is able to hold stakes in so many houses because most are 50-50 joint ventures, where a partner brings the capital and Mr McDonald contributes his expertise in property conversions and management.

“I think we need to get away from this ‘Everyone has to own a home’,” said Mr Jeremy Kronick, a researcher at the C.D. Howe Institute, a Toronto-based think-tank. “Everyone has to have a home to live in that they can afford and that meets their needs. But it’s not clear to me that you have to have 70 per cent ownership.”

Critics like Generation Squeeze’s Prof Kershaw say that having investors convert detached houses into apartments is not the best way to serve Canada’s renters, who risk losing their home when the landlord decides to cash out.

Meanwhile Canada’s smaller investors may start to find themselves priced out of the market by the pandemic boom, as rents – which are tightly controlled by provincial governments – fail to keep up with the ballooning costs of buying and maintaining homes.

“Single rental income typically won’t cover the expenses of a property, and it’s becoming harder with even duplexes in some areas,” said Mr Vlad Maevskiy, an owner of 14 properties in Toronto’s suburbs who quit his IT consulting job last year to focus on real estate full time. “It’s hard to compete with somebody who is prepared to pay ridiculous money over asking.”