3 Government Policies Helping Real Estate Investors!

The government is helping real estate investors!

Yes you read that right; the government is helping real estate investors. Here are three government policies that are helping real estate investors.

1. Mortgage Stress Test: Having to qualify at 2% higher than the contract rates and at 25 year amortization has pushed and continues to push a lot of buyers out of the market into the rental housing market, which creates more demand in the rental space. That’s more tenants looking for rentals properties.

2. Rent Control: With the Fair Housing Plan announcement back in April 2017, putting rent control across the board for all rental units in the province of Ontario, less tenants are moving out of their rental units, which is restricting supply of rental housing in the marketplace. Tenants looking for places to rent, due to the lack of rental supply and the strong demand which is driven by jobs, rental prices have been appreciating at 8-10% for the last two years, which is well above the 1.8% capped rate that the government allows. Rent control does not apply for rental units that become available once the tenants move out. Landlords can set the rent for these rental units back to what the market can bear.

3. Immigration: From 2007 to 2017, the population of the Greater Toronto area has grown by just under 1 million people. That's 100,000 people per year from 2007 to 2017. We are not building enough housing to accommodate the 100,000 new people moving to the Greater Toronto area. Demand continues to outstrip supply, which pushes real estate values higher as well as rental prices.

With respect to where to invest in the GTA, anywhere is not a good approach. There are three factors I look at: 1. Jobs

2. Transportation

3. Follow the big money (where governments and developers are investing)

For more information about investing in real estate and where to invest, feel free to connect.