The Renters Dilemma: A Must Read
I’d like to preface this article by clarifying that this not intended to offend or depress or make anyone feel angry. It is an important perspective with respect to the future of rents. Young people are what makes Toronto vibrant and fun and alive and as affordability erodes they are the most impacted.
There is a whole generation coming up in the downtown core who will not be living in downtown Toronto in 10 years. This will be the first generation to be pushed out by the rising cost of rent. Purchasing a property is becoming something only the rich can afford and prices are going to rise more in the next two years (double digits in both condo and single family sectors) further pushing the dream of home ownership out of reach.The city is running out of land and therefore the ability to produce large numbers or condos or rental apartments is beginning to diminish. The City is holding developments to very low density levels in many areas restricting new supply, The government is making it harder to get a mortgage and demand is outpacing supply.So, if you do not own your home or condo you will be subject to rising rents.Most tenants are feeling it right now as their leases come up and their landlords advise them of substantial rent increases. It is a myth that rents fall
under a guideline restricting increases. This only applies to properties built before 1996.If you are living in a condo which was built post 1996 you may very well see this first hand. But fear not, for there is a solution.
It sounds simple because it is simple. Partner with your parents. If your parents help you with the downpayment on a small condo today the money they give you will grow in the form of equity and allow you to rise up the property ladder. Think about it, for most of us we are going to inherit that money anyway. If it is used to purchase a property now it will go a lot further than getting it in cash years down the road when housing prices have doubled.
Let me know if you have any questions.