More rental inflation coming to Toronto… this time from Ottawa?
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Speaker 1: This next article I want to bring to your attention is from the Globe and Mail, and this is all about the Federal Government’s new housing strategy, which came out in the last week. “Ottawa to offer direct subsidies to low income tenants.” So, essentially, part of their strategy, one of the things they’re going to do, the Federal Government is actually going to write cheques apparently up to $200 a month, is what I’ve read, so $2,400 a year to help people pay for rent. So as the cost of living in this country and especially in our big cities Toronto and Vancouver becoming more and more expensive, the Federal Government’s saying, “Here, here’s some free money that you can go out and use it to pay for rent.”
So, as a condo investor, how do I look this? I look at this as inflation. This is another inflationary force that’s going to push rental prices up. That again is another underlying support in the foundation of real estate investing, especially in our big cities, especially in condominiums downtown Toronto. This money’s not going to your tenants, your customers. But it doesn’t matter as a condo investor, it doesn’t matter. This is all part of the whole system, the whole ecosystem of housing in Canada and our cities, and this is inflation that’s going to push up rental prices. It’s still not addressing the core problem here as much as it needs to at least, that is supply. We don’t have enough supply, we don’t have enough housing. Our cities, Toronto and Vancouver, are growing and we need more housing, we don’t have enough.
So they’re just looking at the demand side, they’re just writing cheques to people. That’s going to drive up demand for rentals at the low end. It’s going to affect the whole spectrum. People are getting free money. They’re going to look to upgrade their housing. They’re going to look to move. They’re going to look to get better housing and that’s going to affect the entire system.
Unfortunately, when those people go out and look for housing with their $200 extra per month, they’re going to find that that doesn’t get them nearly what it did in the past because the rental rates are rising so much, and there’s no supply. There is nothing out there to rent. The rent control is making people stay in place longer. These are all issues we’ve talked about in the past but, again, inflationary pressure, which is another reason to invest in condos.