Toronto Market Watch :A Rental Update
The tightening of mortgage lending rules a year ago changed more than the climate of the resale housing market, it has also changed the landscape of the rental market. More “would be” first time home buyers are having to put their dreams of home ownership on hold- this has definitely created a demand for more rental units and has also driven up rental prices.
I have noticed a growing number of my clients are selling their homes and choosing to rent. Above the change in mortgage lending, there are many reasons for this trend. Some are uncertain where to buy, as they are assessing their needs- I have downsizers and empty nesters, some clients wishing to explore a more urban lifestyle. Other’s know they want to build or renovate their “dream” home, this takes time, so renting makes sense.
Long term, I see a need for single family rentals in good established neighbourhoods. Demand and rental prices are being driven higher every day. If you have been considering getting into the real estate markets as an investor, now might be the time. Interest rates are incredibly low and demand for rental housing is at an all time high. I strongly believe that buying a second, income generating home, is a viable way to diversify your portfolio, build wealth and offer some valuable annual income tax savings.
I think you will that the following article, recently appearing in The Globe and Mail, raises some valid questions whether it makes sense to rent or buy. In my experience, in only very specific and special circumstances renting is a better option than buying.