02-29-2016, 01:26 PM
I wonder what the shelf life of the existing 'new-build' apartments/condos actually is. Anecdotally, I have heard from some trades about construction short-cuts that are being covered up to save money for the builder/developer with the knowledge that the new owners will have to pay to correct the problems in the future.
Similarly, we have seen stories about the purported condo-boom in Waterloo Region that is being fueled by investors hoping to win big by flipping their newly constructed condo/apartments before they are even built yet.
I'm not sure if there ever has been a full census of how many beds there of the "stuff-a-house" variety given the difficulty of tracking them. If you assume that those 8300 new beds are going to soak up 8300 tenants out of those houses, that might mean between 1000 (8 to a unit) and 2000 (4 to a unit) rental houses or apartment units would be empty. Regardless, given that UW, WLU and Conestoga themselves are only predicting single-digit growth in the coming years, the gap is only going to widen.
Similarly, according to the CHMC, local population growth has dipped below one per cent and the Ontario population aged 17-21 is also predicted to decline. It's currently a race to the finish to see who can get their building built first before the population dries up.
The question is going to be, how long can the small-time investors hold on before they have to lower their rents? Given that many of these units are likely purchased with borrowed money anyways, more than a few people are going to have to re-evaluate their investment plans.
Similarly, we have seen stories about the purported condo-boom in Waterloo Region that is being fueled by investors hoping to win big by flipping their newly constructed condo/apartments before they are even built yet.
I'm not sure if there ever has been a full census of how many beds there of the "stuff-a-house" variety given the difficulty of tracking them. If you assume that those 8300 new beds are going to soak up 8300 tenants out of those houses, that might mean between 1000 (8 to a unit) and 2000 (4 to a unit) rental houses or apartment units would be empty. Regardless, given that UW, WLU and Conestoga themselves are only predicting single-digit growth in the coming years, the gap is only going to widen.
Similarly, according to the CHMC, local population growth has dipped below one per cent and the Ontario population aged 17-21 is also predicted to decline. It's currently a race to the finish to see who can get their building built first before the population dries up.
The question is going to be, how long can the small-time investors hold on before they have to lower their rents? Given that many of these units are likely purchased with borrowed money anyways, more than a few people are going to have to re-evaluate their investment plans.