How landlords' problems will affect Canadian tenants
Landlords and tenants usually have no compassion for each other, but they have problems in common.
Canadian renters are not inclined to sympathize with their landlords: the cost of rent in most Canadian cities is rising. But landlords, too, have problems that negatively affect tenants.
Investing in housing is not profitable at the moment. In 2023, the Canadian real estate market is facing a crisis. Now the demand for houses and apartments is too high, and therefore prices are unreasonably high. Typically, investors buy housing hoping that in the future its value will rise. In the current situation it will go down. It is likely that in 2024, housing in Canada will cost less than it does now. So it does not make sense for investors to buy it this year.
Because of this, next year there may be more people who want to rent a house than those who offer rent. There will be more demand than supply, and the cost of renting will rise again.
There are already some interesting statistics about the problems with rental housing. According to a study by Urbanation and CIBC, it's not just landlords' greed that's to blame for high rental prices in 2023. This category of people are facing negative cash flow on their properties for the first time since 2017. Rental income is less than mortgage costs. Real estate taxes and rent are the additional expenses. The situation is absurd: renters are paying more and more, while landlords are getting less and losing money.
It's all the fault of the loan rate hike that Central Bank of Canada has resorted to. Paying mortgages is hard now, and most Canadian landlords took their properties on credit.
But there is good news. The problems of the real estate market concern mainly large cities and popular provinces such as Ontario and British Columbia. In the case of provinces located on the prairies, it's not so bad: housing in Alberta, Saskatchewan and Manitoba is becoming more affordable.
In addition, the authorities of Canada do not intend to sit idly by. They are trying to borrow the experience of other countries to make the purchase and rental of housing more affordable.
