Jennifer Paterson
Other
While the Bank of Canada’s interest rate cut has been praised for opening the real estate doors to a new crop of first-time buyers, many experts are actually seeing would-be buyers stay put in the rental market, which is great news for investors.
“We are seeing a trend towards first-time buyers foregoing condo purchases and saving up to buy a single-family home,” said Randy Dyck, an investor and real estate agent at Eximus in B.C.’s Fraser Valley.
Skipping over a condo purchase, that typical first rung on the property ladder, to save longer for a larger home still means that renters will eventually convert into homebuyers, but it keeps them in the rental pool just a little bit longer.
“I prefer to see clients rent and save for a house,” said Sarah Daniels, a Realtor at Bay Realty in Vancouver. “First-time buyers need to try to get more bang for their buck. I would recommend they rent longer and save.”
The rental market in the Greater Toronto Area has been very good to investors, added Erwin Szeto, a sales representative at Rock Star Real Estate. “This is largely thanks to immigration and in-migration, so demand from renters and buyers is increasing.”
But with these new Canadian families, rising house prices and rent increases, the GTA has become less affordable, so renters are moving to cities in the surrounding areas, where it is still affordable to rent.
“In Hamilton, my investor clients are reporting limited vacancy for houses and apartments and our rents have been consistently climbing,” added Szeto.
“Our typical rent-to-own starter homes commanded $1,500 to $1,600 three years ago and today we are seeing $1,750 to $1,850 in Hamilton.”
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