How the changes to Canadian Mortgages could impact the rental market

Investor or tenant

A general opinion is that the new Canadian Mortgage Rules will not have too much of an impact on a rental market that is already stretched. The overall situation could be influenced by there being a lack of rental apartments in most cities in Canada. The fact that the new ruling will make it more of a challenge for first home buyers and investors to obtain a mortgage in Guelph could affect rental demand as well as the number of new properties’ becoming available for potential tenants.

An example of the present situation can be seen in Toronto, which has reportedly approximately 1-million units allocated for housing, with about 50-percent of them delegated as rental accommodation! The tenancy situation, or cycle, is continually shifting; with people vacating because of broken relationships, death, or relocating. This contributes to the ongoing and increasing demand with potential new tenants entering the marketplace every day from a variety of sources.  

Conflicting concerns

Apart from those seeking a first mortgage in Guelph, there are various contributing factors that affect the availability of rental accommodation. There are contrasts regarding the impact of an influx of would-be tenants created by disappointed home buyers not meeting the new Mortgage Rules criterion. While some consider the comparative volume to be negligible, others forecast a sizable number of tenants will be transferred from the homeowners market into the rental market.

The new Canadian Mortgage Rules have to a significant degree, created a cauldron of supposition. Again looking at the Toronto market as an example; it does seem the gathered information is founded primarily on the condo-rental-market segment and does not take into account the complete rental accommodation availability. This is a crucial calculation because according to the Canada Mortgage and Housing Corporation (CMHC), there are approximately 3-times more rental-purpose constructed apartments in Toronto than rented condos.

Historic reasoning

History has a way of repeating itself, and it is on this basis that attention is given to the fact that the only influence on a dramatic change in the vacancy ratio of a Canadian city, is either an economic upswing or it drops! One exception to this rule is Calgary, but it is not the common rule. If you are considering applying for a mortgage in Guelph, now is the time to get some expert advice from a qualified professional!