Garry Marr
Other
Could developers faced with a glut of condominiums turn to apartments?
Real estate brokerage Rock Advisors Inc. is predicting that the number of purpose-built apartments will grow in 2014 as developers look elsewhere for income.
“Everything that a condominium developer does can be applied to the building of apartments,” says Derek Lobo, chief executive of Rock Advisors, in a release.
He says purpose-built rental apartments avoided the 2008 recession and continue to outperform all other sectors of the real estate market. “Purpose-built rental apartments give such developers an ongoing revenue stream if they hold onto a building and rent out the units rather then selling the building for a quick buck,” said Mr. Lobo.
He noted the 36,186 housing units started in Toronto were up from the month before and he says apartments starts have helped bolster the housing market.
Mr. Lobo maintains heated housing markets will do better as people pursue apartments as an alternative to home ownership.
“The heated housing markets are why apartments will do better in 2014,” says Mr. Lobo. “More and more Canadians are finding the high cost of home ownership isn’t what it’s cracked up to be. Even with condominiums, the cost of maintaining a mortgage and paying condominium fees presents an ownership premium of 10% over what it costs to rent an apartment.”