Realtors and Civic Planners may have entirely different lines of work, but the decisions made by civic planners have a great deal of relevance for realtors and how they’ll be conducting their business. As it regards civic planning, it’s been said that if you’re a in a metropolitan area then having the majority of your inhabitants living in multi-family developments then you’ve done well in crafting the growth of your region. Not surprisingly, it is true that the majority of people in heavily populated urban centres in Canada are in fact living in condominiums or rental apartments.
Now no realtor will need to be convinced of the need for a healthy rental housing market, as it serves a very pivotal role in the progression from young people starting out in life to future qualified homebuyers. Without it fewer of them reach the point of being qualified prospective buyers and it’s true that there’s too few of them to begin with. Finding new clients for a real estate business is challenging for many reasons, and it’s for this reason that here at Real Estate Leads our online real estate lead generation system is such a good choice for those new to the business.
But back to topic, it’s good to see that the demand for rental housing in Canada is being identified and received in the manner it should be.
Challenges and Opportunities
Population growth, demographics and housing affordability are currently fuelling the strong demand for apartments in Canada. These factors, together with insufficient and constrained rental supply, are making existing housing challenges more severe. The fact that there is a growing imbalance between housing demand and supply shouldn’t come as a surprise, and neither should the apartment market in Canada remaining strong for the foreseeable future.
Apartments have always been a vital part of the housing solution for many Canadians. That’s true whether they are entering the rental market by choice, or out of necessity. It’s true that most immigrants who enter the country and do not have the capital to own a home remain in the rental market for 10 years or so before home ownership becomes a viable option.
What’s most interesting to note is that there is a trend in our population where people are increasingly opting for an apartment-rental lifestyle that is not related to affordability.
As the children of baby boomers move on, those aging baby boomers usually downsize from single-family homes.
This then factors into an increased demand for rental properties in familiar, desirable communities which provide convenient transportation and amenities. As millennials – the children of these baby boomers – come to reach the usual age for making their own independent households, more of them are now choosing affordable urban apartment rentals over purchasing houses in the suburbs.
A recent study indicated that there are about 730,000 millennials living in the Greater Toronto and Hamilton Area who may be planning to move on from living in their parents’ homes and from sharing a dwelling with roommates in the next 10 years. This has the potential to create 500,000 new households. Based on this stimulus we are likely going to see a significant housing shift in major urban regions, as this large wave of millennials start to look for a place of their own.
Then add the estimated 100,000+ new residents that come to the the major cities every year and we really do have the makings for different housing crises.
The challenge for millennials planning to move out of their parents’ homes and into the rental market will be in saving up enough for a down payment – while still paying current, escalating rental rates. In Toronto and Vancouver in particular, these rates are both exorbitant and debilitating for many people.
Across Canada, the provincial and federal government have made efforts to control housing prices, and these prices are expected to appreciate modestly throughout the last bit of the year here. The federal government has tightened rules for mortgages even further, implemented new restrictions on government insurance for low-ratio mortgages, and issued new reporting rules for capital gains exemptions on primary residences.
While the underlying objectives are appropriate for the present situation, these initiatives are probably not going to solve the housing affordability crisis on their own.
The cost of breaking into the housing market makes home ownership challenging and Canadians will continue to have to weigh an apartment rental as an affordable – and perhaps smarter – option. It’s interesting to note in relation to it that demand for rental housing is outpacing home ownership for the first time in many decades.
Municipal Governments need to be extremely proactive in developing rental housing on a very large scale, and there’s not time for delays and inactivity with this. It’s essential for the maintenance of a healthy housing market, which stands to benefit both individuals and those whose careers depend on it.
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