“More now than ever, we’re still a strong rental market in Ontario, and, in some cases, it’s outweighing the demand we see for homeownership,” said Ted Tsiakopoulous, CMHC’s Ontario Regional Economist, in an interview with CREW
“There is strong demand amongst millennials aged 25-34 to rent condos because they can’t yet afford that down payment, or are taking longer to do so, but still want to rent along a transit line.”
It’s not just here in Toronto
, he said, with London
seeing the same trend, where demand could outpace the GTA in resale markets.
His comments come as the CMHC is expecting housing activity will increase throughout most of 2015 before slowing down in 2016, with the expectation that mortgage rates could rise.
The news also comes at a time when investors are riding high on optimism and confidence in Toronto
. Some 55% of investors in the latter market anticipate value gains this year – a seven percentage point jump from the 2013 figure.
While the results of the survey took place largely before the oil shock took hold, Ontario and B.C. have come away relatively unscathed from the short-term impact now being felt in the Prairies.
Among respondents, 54 per cent bought their last secondary condo unit for rental income, though that figure rose to nearly 80 per cent among investors whose last purchased unit was rented out at the time they responded to the survey. Many plan to hold on to their investments for five years or more.
“An improving economy will be more supportive of the Ontario housing market in 2015 than it has been in the recent past,” said Tsiakopoulos. “However, as mortgage carrying costs continue to grow, particularly for single-family homes, demand will increasingly shift to more affordable housing.”
While home prices are expected to grow at a slower rate, sales are forecast to range between 192,000 to 218,000 units in 2015 before slowing to between 182,900 and 213,400 units in 2016.
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The pool of renters is getting deeper by the quarter for landlords, according to a CMHC report.