News: Affordable Housing Constraints & The Escape to Small Towns

In this week's Industry News (Week of 9 Aug 2021).

PBO reports federal housing strategy having 'limited' impact on affordable housing | The Canadian Press The number of households in need of an adequate or affordable place to live will increase to about 1.8 million within five years unless more funding flows toward the problem. The affordability gap — the difference between the cost of a housing unit and the price a low-income Canadian can afford — is slated to rise by 24 per cent to $9.4 billion over the next five years. "Flashy announcements and promises of ever-increasing spending will not fix the housing affordability crisis in Canada. We need a housing plan in Canada that gets homes built and empowers Canadians to be able to own a home in their lifetime," Tory housing critic Brad Vis and Conservative House leader Gérard Deltell said in a statement. With the affordability gap growing, it is paramount that Canada supports alternative housing solutions. Konfidis and its partners provide a professional rental solution to prospective tenants and are aligned with tenants as we seek to establish a brand and reputation of trust with Canadian families and communities. Konfidis also provides a technology-focused strategy to provide best-in-class tenant services such as streamlined rental payments and maintenance requests supports a high-quality and amenity-rich offering for tenants. Full press release available here.

First-time buyers escape to small towns in search of affordable housing | The Globe and Mail Despite the real-estate market needing first-time buyers to remain healthy, Matthew Regan, a broker at Royal LePage Real Estate Services, says they face many challenges in accessing the market. On June 1, tighter stress test rules came into effect, which place even more pressure on first-time buyers. And while interest rates are low, inventory is extremely slim. The high demand for few listings pushes prices up, he notes. “They’re faced with this reality that the dream of owning a home, to many of them, is out of reach. If you’re looking in a major market, it’s a harsh reality.” While home ownership becomes increasingly challenging for many prospective first-time home buyers, Konfidis and its partners are excited to offer an alternative but high-quality rental housing solution with long-term comfort. Professional long-term ownership provides tenants with security of tenure, without the constant fear of eviction from mom-and-pop owners. Full press release available here.

The secret behind Halifax’s ability to build rentals at a record pace | National Post Since the early 1970s, purpose-built rental (PBR) housing construction has taken a backseat in Canada to the homeownership market comprising freehold and condominium housing. Despite high rental demand, the construction of PBR housing has been less than adequate, even in populous cities such as Toronto and Montreal where rental housing is more pronounced. Over the past two decades, rental housing starts accounted for fewer than 10 per cent of the new construction in places like Toronto and Ottawa. Yet, Halifax has defied this trend. Rental housing construction accounts for more than half of the new housing being built in Nova Scotia’s capital. For instance, 63.4 per cent of the housing starts in Halifax during 2020 comprised rental dwellings. Is there something in the water that allows Halifax to build rental housing when larger cities have struggled to do the same? This article examines the unique supply and demand characteristics of the Halifax housing market that has bolstered purpose-built rental housing construction. Halifax’s success with rental housing construction demonstrates how public and private entities may collaborate to build sufficient rental housing in places where the demand for rental housing is high. An absence of rent controls in the past, supportive socio-demographics, and imaginative homebuilders and rental investors have been critical to resolving the rental housing challenges. Full article available here.

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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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