|
2009’s First-Time Buyers Will Stay Renters in 2010
April 2010
|
|
| Ted Tsiakopoulos, Ontario Regional Economist for Canada Mortgage and Housing Corporation |
|
| *V-Report Sponsors |
 |
| *Not affiliated with V-Report Speakers |
| |
By Hayley Mitchell
Ted Tsiakopoulos, Ontario Regional economist at Canada Mortgage and Housing Corporation (CMHC) looks to the past, present and future real estate market to explain his thoughts on where the rental market will go in 2009.
Starting with the first quarter of 2009, the housing market made a fast recovery, due to extremely low interest rates, which attracted first-time home buyers, who became the main driver in the real estate boom. These previous renters were able to make the shift to homeownership, with the largest shift happening west of Québec in the urban centers of Ontario, Alberta and British Columbia. In turn, vacancy rates went up in 2009, reaching 3.5 per cent in Ontario, 5.5 per cent in Alberta and 2.8 per cent in B.C.
CMHC believes that interest rates along with other policy changes will add to the cost of owning a home in the back half of 2010, which will eliminate that enlarged first-time buyer market that was the driver in the 2009 recovery. “That suggests that fewer renter households will be shifting out of rental into homeownership,” Tsiakopoulos says. By middle of 2010 the story will begin to change for the rental market, with rental units in higher demand. He says that the rental market will tighten up again and that “vacancy rates will move down to perhaps where they were several years ago.” For example, the Toronto rental market will tighten with vacancy rates dropping to 2.9 per cent in 2011 from a projected vacancy rate of 3.3 per cent this year. The story in Calgary and Vancouver will look similar by the second half of 2010.
|
| Additional V-Report Opinions: |
|
|