Every little while, we send out a brief summary of notable news that will be of interest to Investors in residential real estate in the Greater Toronto Area. Here are three interesting pieces of info that have crossed our desk over the last few weeks.
Condo rental prices and income have reached pre-pandemic levels.
Rental deals available earlier in the COVID-19 pandemic appear to be disappearing in a changing market as data on monthly rents for apartments and condos in Toronto show a rebound close to pre-pandemic levels. A recent report shows that rents for condos and apartments are virtually back to what they were in 2019. The biggest jump in 2021 was among larger, luxury units — $2, 795 a month in January versus $3,350 a month in July. The report found that the average monthly rent is more than $1,800 for a one-bedroom in Toronto and more than $2,600 for a two-bedroom. Click here for the full article.
Are Investors to blame for Escalating Canadian home prices?
According to data published in the Bank of Canada’s (BoC) financial system review, investors represented one-fifth of all residential purchases nationwide. Since the early days of the once-in-a-century global health crisis, investor buying advanced 20.1 per cent. In the Greater Toronto and Hamilton Area (GTHA), investors accounted for 22.7% of home purchases, says BoC. This is higher than in the pre-pandemic economy but lower than at the end of the previous housing boom.
Considering that the national average home price has skyrocketed by more than a third to north of $700,000, it would be simple to surmise that this is the doing of real estate investors. However, experts contend that it could be difficult to reach this conclusion without further study.
Click here for the full article.
Maybe things are different in the downtown condo market, but here in the suburbs, we are not seeing that investors are responsible for rising prices. There is no way that 20% of home purchases here are being made by landlords and/or speculators (home-flippers). That said, if the BoC believes that investors are to blame, it would make sense that they’d consider a different tax structure for investors in order to help cool prices. Yikes.
How Much Equity can you use to buy a Second Property?
Most people don’t just have $100k sitting around in the bank waiting for a rainy day. So how do some people afford to buy rental properties? Tapping into your home equity can help make buying a second home easier for many Canadians. This article covers what home equity is, how much of it you can use, and how you can use home equity to increase your wealth. Click here for the full article.
RESOURCES FOR REAL ESTATE INVESTORS
- Ontario Ministry of Municipal Affairs and Housing <—go here for general info about rental rights, rent increase guidelines, and rental housing enforcement guidelines.
- Ontario Landlord & Tenant Board. <—go here to access forms for landlords and tenants to use for starting/modifying/ending tenancies.