Recently, news of a Condo developer planning to invest $1B in buying single-family homes across the country made headlines and sent ripples across the real estate industry. This is a calculated move designed to profit from the current housing crisis gripping Canada.
A combination of factors including increased immigration, fewer supply of houses in relation to demand, low interest rates, etc have caused house prices to skyrocket to an all-time high. This means more potential house-owners are finding themselves unable to afford a suitable home. With huge funding-backed corporates now looking to buy single-family houses, it’s possible that there’s even more pressure on the housing market. This has already been noticed in the US. A recent Business Insider article described an incident where a billion-dollar private equity firm comfortably beat an everyday American family seeking to buy a home.
According to Insider, “In December, for instance, Cerberus paid $287,000 for 217 Heffron Circle, a four-bedroom Maineville home with a roomy backyard and a three-car garage. The investment firm beat out a family that had placed a higher bid of $295,000, which was closer to the home’s asking price of $300,000, according to Michelle Sloan, a RE/MAX broker who manages its Maineville office and who represented the seller in the deal. The family had made its offer contingent on securing a mortgage for the property, whereas Cerberus was willing to pay cash.
“My client opted for the less risky offer for cash,” Sloan said.”
With such a gloomy outlook for the housing situation, there is a natural upswing in the demand for rentals - and especially single-family ones. In this article, we’ve separately covered the attractions of a single-family rental for both tenants and investors/landlords.
With the demand for single-family rentals higher now than ever before, this begs the question - are we looking at a future where paying rent for a lifetime becomes normal, and house ownership is next to impossible? This remains to be seen.
This article offers general information only, is current as of the date of publication, and is not intended as legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. While the information presented is believed to be factual and current, its accuracy is not guaranteed and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author(s) as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Tenantcube Inc. or its affiliates.
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