News: Impact of Rent Control Prices, Mattamy & the Condo Space
- Shael Soberano
- Jun 29, 2021
- 3 min read
Updated: Jan 12, 2022
In this week's Industry News (Week of 28 Jun 2021).
CMHC says rent controls work, but is that so? | National Post
A new report by Canada Mortgage and Housing Corp. (CMHC) exploring the impact of rent controls on rental prices in the Toronto region concludes that “rent control accounts for 36.3 per cent of the difference between uncontrolled and controlled rents.”
A vast body of literature shows that restrictions on rent increases dissuade landlords from keeping dwellings in a state of good repair. More importantly, rent controls restrict landlords’ future cash flows (hence, profitability), resulting in a decline of purpose-built rental housing supply.
At Konfidis, we are focused on providing high-quality rental solutions for Canadian families. In Ontario, as an example, strict rental controls disincentivize mom-and-pop landlords to provide even minimal service to existing tenants as landlords are aligned to generate turnover and mark-to-market rents with vacancy decontrol. Further, mom-and-pop landlords can end tenancy if the landlord, a purchaser, or a family member requires the rental unit for personal use.
Konfidis and its partners provide a professional rental solution to prospective tenants and are aligned with tenants as it seeks to establish a brand and reputation of trust with Canadian families and communities. Further, Professional long-term ownership provides tenants with security of tenure, without the constant fear of eviction from mom-and-pop owners.
House builder Mattamy Homes plans to move into high-rise condo construction | The Globe and Mail
Real estate developer Mattamy Homes, known as a force in the suburbs, wants to meet soaring demand for homes in the Toronto area by building up, along with out.
We often talk about supply and demand fundamentals at Konfidis; and experts often point to the lack of the right type of new supply as a driver of accelerated housing unaffordability for Canadians. While demographic and social trends drive further demand for larger format and suburban housing, Canada's largest developers shift focus to the delivery of new urban high-rise inventory. Unless Canadian policymakers can find paths to incentivize the development of single-family and larger format new housing, there is no reason to think home price trends will deviate.
Ottawa should exempt American cottagers from its proposed vacant-home tax for foreigners | The Globe and Mail (Opinion)
Another bilateral beef is brewing between Canada and the United States – this time over housing. U.S. citizens who own residential properties in Canada are riled by the Trudeau government’s plan to slap a tax on foreign-owned vacant homes, according to published reports. In typical fashion, Ottawa has been slow to offer details about the levy and ordinary Americans are understandably frustrated with the vagaries of Canadian policy making. (Just imagine how we Canadians feel.)
"The proposed 1-per-cent annual tax on the value of foreign owned residential real estate will apply to properties that are considered “vacant or underused.” It is scheduled to take effect on Jan. 1, 2022, according to the federal budget."
Should the proposed tax not exempt American cottagers, some are concerned with potential retaliatory measures for Canadian's who own property in the U.S... "It’s not known exactly how many snowbirds are property owners south of the border, but up to 375,000 Canadians typically spent winter months in the United States and Mexico prior to the pandemic, according to a 2019 report from Statistics Canada."
Toronto ranked 2nd most expensive city in Canada but not high on world list | Mercer
While the cost of living has gone up this year, Toronto is still ranked rather low on the list of the 209 most expensive cities in the world. The results of Mercer's 2021 Cost of Living Survey are in and Toronto has jumped from 115th last year to 98th this year.
"Globally, Canada remains a relatively affordable place to live and an attractive destination for remote workers," said Gordon Frost, Partner at Mercer Canada.
Konfidis is pleased to share our weekly real estate investing industry news piece herein. We love connecting with our members. Reach out with your questions to hello@konfidis.com.
Shael Soberano, CFA Konfidis Inc. Chief Investment Officer
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