News: Lack of Housing Supply's Impact on Household Formations & Prices
- Shael Soberano
- Jul 7, 2021
- 2 min read
Updated: Jan 12, 2022
In this week's Industry News (Week of 5 Jul 2021).
Ontarian's on the Move, 2021 Edition #16 - Housing demand and the growth in the number of households. I Mike Moffatt, Medium.com
Over the past four years, Ontario built 100,000 fewer homes than it should have, given our population growth.
We have been consistent in our messaging pertaining to the importance of understanding the imbalanced supply and demand metrics that drive home prices higher. Mike Moffatt clearly illustrates these dynamics through imperial evidence; the lack of new housing supply has suppressed household formations and is pushing home prices higher.
CMHC eases mortgage insurance rules, admits tightening was a mistake | Rachelle Younglai - Real estate reporter, The Globe and Mail
While the quality of the CMHC's portfolio improved, the agency lost market share to other private-sector insurers and its actions did not slow demand.
A year ago, CMHC introduced further measures in an attempt to improve profitability AND slow housing demand. The outcome? Canadian real estate demand did not decline and homeowners seeking mortgage insurance were forced to explore more expensive solutions, leading to an increased cost of ownership. Unfortunately, this represents another example of ineffective demand-side policymaking. However, CMHC does have the tools to support new housing supply with the CMHC National Housing Strategy. An expansion of this program to support supply-side initiatives may be CMHC's best tool to combat unaffordability.
KKR Joins Private Equity Rivals in New Single-Family Rentals Bet I Patrick Clark and Gillian Tan, Bloomberg News
KKR & Co. (a ~U$250 Billion Asset Manager) is making a fresh play for the suburbs, forming a new single-family landlord, My Community Homes, that plans to buy and manage rental houses across the U.S.
This is yet another example of the single-family rental (SFR) sector becoming a sought after real estate asset class. Konfidis' mission as a real estate investment company is to enable investor access to the Canadian residential real estate asset class with the most advanced analytical tools leveraging technology and big data, while supporting Canadian families with high-quality alternative housing solutions.
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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