Over the last three months, housing starts in Canada have seen a decline. If this trend continues it could discourage investors from getting into the rental market. CMHC’s Deputy Chief Economist, Mathieu Laberge noted the decline in a recent report and attributed the decrease to fewer homes, both single family and multi unit types, going up in British Columbia and Ontario. In these two areas the number of presales on homes has gone down, compared to the interest in the latter part of 2010 and through the beginning of 2011.
Urban housing starts saw a four percent decrease this past November, with 174,323 units starting. Single family home starts went down 5.4 percent, to 58,606 units and in the multi family starts the numbers went down 3.2 percent, with 115,717 units started..
This is causing investors eager to get into the rental market to take a wait and see attitude before jumping into that market, particularly in those regions seeing the worst decline. But it appears that this news is not surprising to some of these buyers.
Royal LePage’s Paul Hatfield noted that metro areas like Vancouver and Toronto have experienced rapid growth for some time now. The market is just playing catch up. But not all provinces are telling the same story. Hatfield advises prospective buyers to purchase properties in areas they know well, and only after studying the situation.
It is possible to find communities that are still experiencing growth and would be profitable for a rental venture. Best advice is to consult a real estate agent that knows the area you are interested in. That way you’ll have the latest information at your fingertips.