Persistent challenges in Canada's rental market: What can be done?
Canada’s primary rental market is facing major challenges, as large demand continues to outpace available supply. This has weakened affordability and caused record-low rental vacancy rates, as indicated in Canada Mortgage and Housing Corporation (CMHC)’s latest Rental Market Report (RMR). “Young families are struggling to find places to live not just for ownership but also to rent” Dean Artenosi, realtor, author and co-owner of Coldwell Banker The Real Estate Centre Brokerage in Newmarket, Ontario, reviewed the RMR, and what stands out most to him is the substantial increase in rental rates for turnover two-bedroom units. “This is telling us that young families are especially struggling to find housing and are prepared to pay for larger rent increases, as high as 40 per cent in cities like Toronto. Young families are struggling to find places to live not just for ownership but also to rent. Smaller units are being developed in new sites is the norm.” Artenosi explains that on one of his sites, units are as small as 365 square feet. “It costs more to build smaller units, more kitchens, bathrooms, etc., but the attractive part is the price point.” What can government do? Artenosi feels that governments need to start finding ways and providing incentives for developers to build large units. “Perhaps it means lowering development charges to assist in bringing the price points down. Perhaps there are other tax incentives for two-bedroom units, like larger HST rebates.” He says that governments should also find ways to speed up the development approval process, pointing out that often, a zoning submission involves various departments (engineering, traffic, environmental, etc.) making comments on a new development proposal and they “get tunnel vision on their part in the commentary process, often delaying approvals from going forward efficiently.” Consider the big picture and compromise These departments need to be mindful of the bigger picture, Artenosi maintains. He feels departments should work together for the common good of planning and development and providing more housing. “Traffic, engineering and landscape will always have challenges that can always be addressed with compromise.” Artenosi suggests enforcing a time frame for each department to provide comments, so the approval process and departments have a sense of urgency. Create a process with city planners in “a mindset of making things happen” He points out that some municipalities create a central submission process to receive and address comments, usually through the city planner on file. “Allow departments and developers to communicate directly, address comments immediately and obtain sign-off directly with the department so that matters can get addressed quickly instead of waiting for circulation through a central point of contact,” he suggests. Artenosi believes the city planner on file for new redevelopment projects should be proactive in addressing matters by bringing departments and developers together and assisting in solutions with both parties. “They need to act as general managers and oversee an efficient approval process. It’s a mindset of making things happen.” Realtors can do more Artenosi is a firm believer in realtors playing a vital part in the affordability crisis. When he began his career, he specialized in turning renters into homeowners, often finding creative solutions for families to get into homes and afford to keep them. “In 1996, if your home had an existing apartment prior to (a certain) date, then you could get the basement retrofitted by the fire marshal and legalize the apartment with retrofit fire codes. This would be known as a legal non-conforming use. I took advantage of this opportunity for young families and not only sold homes with basement apartments in existence prior to the date, but I oversaw the legalization for these secondary units.” He dealt with the fire marshal, handled the inspections, oversaw the renovations and found new tenants for homeowners. “Today, Bill 23 allows for three auxiliary units in detached homes. You have to obtain permits and often there are criteria to do so with the municipalities,” Artenosi explains. “Realtors should not just sell the idea but rather go one step further and assist clients in this process even after the sale.” Other parties can do more Furthermore, Artenosi thinks the CMHC, banks and appraisers should allow for auxiliary units and projected revenue that can be earned from these units to be counted in the approval process for new buyers. “This will allow new potential purchasers to count forecasted (auxiliary unit) revenue towards their total debt servicing ratios and gross debt servicing ratios. Often, they aren’t permitted to count this because (the units) are deemed illegal or, if they’re legal they only allow for 50 per cent of the income to be permitted. If the potential income from a basement dwelling or auxiliary unit covers 50 per cent of the mortgage payment, then why not allow 100 per cent of the forecasted income to count towards the qualification policies to obtain the mortgage?” Opportunity for an improved Purchase Plus Improvements program Artenosi also notes the CMHC’s program, Purchase Plus Improvements, which he utilized often in his earlier days of turning renters into homeowners. “The cost of any renovations can be added to the purchase price and the purchase plus the improvement amount can be financed together as one mortgage,” he explains. Currently, secondary apartments aren’t allowed to be created through the program. But, he believes the CMHC should use the program to 1) allow for its scope to include creating additional auxiliary units in homes, and 2) allow the forecasted revenue to count for young families in their mortgage qualification criteria. “It can be a condition of the program that the holdback for renovation monies will only be released if the municipality approves of the unit or an occupancy permit is provided for the additional unit. Municipalities should not make the registrations or approval process cumbersome, lengthy or costly to allow new families to utilize what Bill 23 is intended to do — provide more housing for Ontarians and Canadians. CHMC’s mandate is to house Canadians.”
Montreal’s resale market starts 2024 strong; Quebec City demand for condominiums up sharply in January: QPAREB
The Quebec Professional Association of Real Estate Brokers (QPAREB) recently released its latest market statistics, highlighting key trends shaping the housing landscape in the Montreal and the Quebec City census metropolitan areas (CMAs). Quebec City In January, Quebec City witnessed a significant uptick in residential sales, particularly in the condominium sector which had its third-best performance in 25 years. High condominium sales and single-family home inventory With 604 sales — a 16 per cent increase compared to January 2023 — the market surpassed historical averages recorded since 2000. This surge was primarily driven by heightened demand in the condominium segment.While condominium sales increased significantly, the inventory of single-family homes for sale went up, contrasting with a decline in condominium listings to levels unseen since 2010. This imbalance between supply and demand continued to exert pressure on prices, maintaining a seller-friendly market environment across all property categories. Plexes are an interesting alternative ‘as prices remain affordable’ “At first glance, the 16 per cent jump in sales in the Quebec City region is comparable to the provincial average for January. However, it masks a strong performance in the condominium sector, thus continuing the trend that began at the end of 2023,” notes Charles Brant, QPAREB market analysis director.“The more marked price growth in single-family homes and the lack of properties in this category continued to drive first-time homebuyers and possibly investors towards the condominium and plex markets. Moreover, plexes are proving to be an interesting alternative as prices remain affordable for buying as a group and as rents in the region continue to rise.” Montreal The residential resale market in Montreal kicked off the year on a strong note, witnessing a notable surge in sales compared to January 2023, particularly in the suburbs. This signalled a promising recovery in activity that’s anticipated to persist. Higher sales thanks to better interest rate expectations Last month, residential sales in the Montreal CMA totaled 2,077 transactions, an 18 per cent increase equivalent to 311 more sales, compared to the same period last year. Although this level of activity remains slightly below historical averages recorded since 2000, the surge in sales is attributed to more favorable interest rate prospects.Brant weighs in: “The solid performance of sales for the start of the year is essentially attributable to more encouraging prospects regarding interest rates. Since late 2023, economists agree that the upcycle in interest rates is behind us and that a reverse process should begin in 2024. This widely shared analysis has been reflected in the bond markets and, for all practical purposes, in a significant decline in fixed mortgage rates. This has been beneficial for the real estate market.” “Sharp slowdown in economic activity and the resulting uncertainties influence the propensity of households to purchase a home” However, he continues to say there are “several headwinds to a more decisive resumption of transactional activity. We are referring to the sharp slowdown in economic activity and the resulting uncertainties that influence the propensity of households to purchase a home.”Despite this, “A change of course by the Bank of Canada suggests a first cut in interest rates later this year. This change in the Bank of Canada’s approach, while not necessarily impacting January’s statistics, is seen as a particularly positive signal in advance of the busy spring season, both on the part of buyers and sellers.” See more detailed statistics for the province and regions. Enjoying this article?Get the latest REM articles in your inbox 3x week so you stay up to date on the latest in the Canadian real estate industry Success! Email Subscribe The post Montreal’s resale market starts 2024 strong; Quebec City demand for condominiums up sharply in January: QPAREB first appeared on REM.The post Montreal’s resale market starts 2024 strong; Quebec City demand for condominiums up sharply in January: QPAREB appeared first on REM.
Celebrate the Heart of Home: Family Day in Ontario!
Happy Family Day! In Ontario, we have a special day dedicated to celebrating the essence of family. Family Day falls on the third Monday in February every year and provides an opportunity for families to spend quality time together and appreciate the importance of familial bonds. As we commemorate this day, it’s worthwhile to consider how our lifestyle and neighborhood play a crucial role in creating a happy and fulfilling family life. Lifestyle is a significant factor that contributes to a family's overall well-being. Finding a balance between work and personal life is essential for maintaining harmonious relationships within the family unit. Our lifestyle choices greatly impact our ability to spend quality time with our loved ones. Living in a neighborhood that offers convenient amenities and family-friendly activities can help create a foundation for a happy family life. When choosing a neighborhood, it's important to consider the amenities and services available nearby. Look for areas with parks, playgrounds, and recreational facilities that cater to families. Living in close proximity to these amenities not only promotes an active lifestyle but also provides opportunities for families to socialize and bond with other families in the community. Additionally, access to good schools and healthcare facilities is crucial for the overall well-being of a family. Safety is another crucial aspect to consider when selecting a neighborhood for your family. Feeling safe and secure in your surroundings is essential for peace of mind. Look for neighborhoods with low crime rates and a strong community presence. A close-knit community often brings neighbors together, fostering a sense of belonging and support. Strong community ties can create lasting friendships for both parents and children alike. Furthermore, the culture and values of a neighborhood can greatly impact a family's experience. Consider the diversity and inclusivity of the community you are considering. Exposure to different cultures and beliefs can enrich a family's perspective and provide valuable learning experiences for children. Additionally, a community that values family-oriented events and traditions can create a sense of unity and togetherness. As real estate professionals, we understand the importance of finding the perfect home that meets your family's unique needs. We strive to help families find a property that not only provides a comfortable living space but also offers a conducive environment for fostering happy and fulfilling family relationships. Our vast knowledge of the local neighborhoods enables us to guide you towards communities that align with your family's values and lifestyle preferences. This Family Day, take a moment to reflect on the significance of family in your life and the impact your lifestyle and neighborhood have on your family's happiness. Whether you're searching for a new home or simply looking to make the most of your current living situation, remember that the right neighborhood can make a world of difference. Embrace the opportunity to explore your local community, engage in family activities, and build lasting memories together. From all of us here, we wish you a joyous and love-filled Family Day!
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