New reports released at the end of November provided evidence of Canada’s rental vacancy rate edging up in 2016 as the supply of apartments has increased. The Canada Mortgage and Housing Crop said the rise in the vacancy year-over-year is partially due to the number of new units hitting the market outpacing the rise in occupancy. Although the rental vacancy rate rose across Canada, Vancouver and Toronto still remain outliers with the ongoing housing boom and seller's market that dominates real estate news.
Taking a closer look at the numbers
Canada’s vacancy rate increased to 3.4% in October of this year up from 3.3% last year. The market in Vancouver and Toronto saw vacancy rates of 0.7% and 1.3%.
One of the biggest highlights of this report saw the average cost of renting a two-bedroom apartment in Vancouver and Toronto soar above the 1.5% annual inflation rate. The cost in Vancouver is up 5.7%, and in Toronto, it’s up 3.1%.
Lack of home ownershipThe federal housing agency noted that fewer renters in 2016 translated into homeowners in Ontario. Home prices have become unaffordable for many in this market, and Government regulations continue to be implemented over the last few years to reduce the amount of debt potential buyers can take on.
New regulations affecting the first time home buyers
The new real estate regulations that have been implemented to cool down the real estate market hasn’t been necessarily beneficial for first time home buyers. Before, buyers finances used to qualify under the promotional rate of 2.39%. However, now their finances are tested against the Bank of Canada’s posted rate which is currently 4.64%.
Regulations that have been put in are having an impact on first time home buyers and the millennial generation as a whole. Many of them are now putting their projects on hold or dropping out of the market altogether, also putting stress on home listings.
Unfortunately, the Niagara housing market is affected by the Toronto housing market in terms of rising prices as people look for alternatives to the soaring housing prices. If you’re looking for property for sale, be sure to connect with Team Davids for the expertise that you need in this hot market.