Are rents set to rise even more?
It’s good news for investors and bad news for tenants as rents may well rise further in 2019.
Rental rates, like anything else, are a function of supply and demand. Many people who may otherwise have planned on buying a home, have been shut out of that process due to dramatically higher prices, tougher mortgage qualification rules, and rising interest rates.
According to rental.ca, average rents nationally will rise 6% but in Toronto, they could be almost double that at 11% with Ottawa (9%) and Vancouver (7%) also set for large increases.
In addition, high immigration rates and strong employment conditions in places like Toronto are fueling demand for housing. How does that impact our market in Southern Georgian Bay?
We have similar situations here with high prices and challenges in arranging financing. We also have a very, very limited stock of rental housing so the demand outstrips supply and the need for affordable housing, or attainable housing is not yet being met despite ongoing discussions around the issue.
The thing I wonder about is, where is the tipping point when nobody can afford to either buy or rent so that prices and rates come down? Is there a point in a growing country? Would love to hear your thoughts.