“There’s the risk of losing the tenant and the property not selling ... [and] I can’t find you another tenant. We used to have 10-12 units up for lease, now it’s 80 units. I’ll put a unit for sale in one building and [get] not a single showing on some of these properties.” 2/
The risks today’s condo investors are facing are typical recessionary risks –
a decline in demand due to a drop in immigration and higher rates of unemployment
an increase in inventory as younger people move back home because of job loss… 3/
These trends feel “out of nowhere” for condo investors because
a) the recession was caused by a pandemic and
b) they’ve never experienced a recession,
but these risks have been there all along – it doesn’t matter what causes the recession.
Every recession is different 4/
The real test now will be to see how resilient and well capitalized Toronto’s condo investors are.
Can they handle a 20+% decline in rents, units vacant for 3+ months etc. or will they end up being distressed sellers? 5/
Much of this will of course depend on how long this recession and pandemic last, the longer this runs the greater the pressure on condo investors.
And I suspect the end of mortgage deferrals will have a much bigger impact on condo investors vs homeowners/
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Last week, Canada’s immigration minister, Marc Miller, announced that the Liberal federal government plans to reduce the number of non-permanent residents (NPR) in Canada from the current 6.2% share of total population to 5% over the next three years. 2/
On the surface, this reduction doesn’t sound like a noteworthy announcement that will have much of an impact
But a closer look at the data makes it clear that this is a significant shift in policy & one that will have wide-reaching effects, particularly on the housing market 3/
This piece argues that 🇨🇦’s 🏠 crisis cannot be solved with a singular focus on building more homes
It suggests that 🇨🇦 should reduce the number of non-permanent residents by 1M people to ease the demand for 🏠 thehub.ca/2024-02-21/mik…
This is a very big change in the main narrative re: our housing crisis
For years, most experts & politicians argued that the solution to our 🏠 crisis was to "Build More Homes"
Countless op-eds and editorials were written blaming supply restrictions for our housing crisis 2/
Do we need more homes? Of course!
But our housing shortage is largely a function of our government’s decision to triple our country’s population growth rate without giving any thought to where everyone will live
A decision that hurt renters and benefitted homeowners 3/
Why did our federal government ignore the warnings of public servants if the impact of Canada’s high population growth on housing was so obvious?
If you rewind the clock by more than 2 years, you'll see that these impacts were not so obvious to some 1/ movesmartly.com/articles/the-f…
Most housing economists at that time concluded that Canada’s booming population wasn’t the key driver of rising home prices.
The key driver of rapidly rising home prices, they argued, was a “lack of supply” driven mainly by municipal inefficiencies and zoning restrictions 2/
While some economists did argue that the rate of growth in Canada’s population was too high and was the main factor driving up house prices and rents, they were the minority voices.
Most housing experts, economists and every political party blamed a “lack of supply” 3/
Homes in Canada have become financial assets for the rich
“We have a large corporation going into smaller communities, scooping up affordable units, making them inaccessible for many of the local residents, and renting them out to the corporation’s sole advantage” 2/
One of the reasons why I often disagree with the housing advocates and economists who argue that the solution to our housing crisis is to just “build more homes”
Is that many of them actually support corporations buying up single-family homes 3/
In my June report, I discussed the Conservative’s “Insane” Solution to Canada’s Housing Crisis
Earlier this month, Conservative housing critic Scott Aitchison was on a podcast to discuss what it will take to fix Canada’s crisis 🧵 thestar.com/podcasts/its-p…
Aitchison’s solution was simple “we need more supply”
How much more?
He argued Canada needs to triple the number of homes we are building
While Aitchison did recognize that tripling housing completions is “insane” he still thinks this is the solution to our housing crisis 2/
So how do the Conservatives plan to achieve this insane goal?
By doing the following:
1⃣ Giving financial bonuses to cities that encourage more housing
2⃣ Tying federal transit funding to housing completions
3⃣ Selling off federal buildings to turn them into housing 3/