The Brokerage firm Royale Lepage released their quarterly House Price Survey report based on proprietary sales data across Canada nationally and in 62 of the nation’s largest real estate markets.
As many suspected, the report found the aggregate price of a home in Canada increased 17.1 per cent year-over-year to $779,000 in the fourth quarter of 2021. Low inventory, lack of supply, increase demand from internal and external migration to the big cities are the main cause for this increase.
For the province of Ontario, the main urban centers all saw a sharp increase. According to the report
- The aggregate price of a home in the Greater Toronto Area increased 17.3 per cent year-over-year to $1,119,800 in the fourth quarter of 2021. Broken out by housing type, the median price of a single-family detached home increased 22.4 per cent to $1,421,200, while the median price of a condominium increased 14.8 per cent to $665,400 during the same period.
- The aggregate price of a home in Ottawa increased 17.2 per cent year-over-year to $739,700 in the fourth quarter of 2021. Broken out by housing type, the median price of a single-family detached home increased 20.0 per cent to $876,600, while the median price of a condominium increased 11.5 per cent to $417,700 during the same period.”
While this increase is only “on paper”, Small landlords will not see any revenue until they sell their properties and pay the remaining mortgage, unpaid arrears, potential damages, closing costs and the capital gain tax according to the industry professionals. Meanwhile Small Ontario Landlords are facing like every business a huge increase in their expenses.
Also according to the report, Canada’s inflation rate reached an 18-year high at the end of 2021, driven by increased costs to consumer goods, including gasoline and food, and significant delays in the supply chain. The Bank of Canada is expected to begin increasing its overnight lending rate incrementally later this year, which would result in higher mortgage rates.
If that happens, many small landlords facing another set of additional costs – utilities, repairs, insurance, properties taxes, mortgage etc… and unable to pass it on to the consumers (tenants) beyond the paltry allowed rent increase will face bankruptcy without financial help from provincial and and federal governments who opened the taxpayers’ wallet to support all others businesses.
Small landlords are the bedrock and the main support for affordable housing in Ontario but they seem to be the most neglected segment of the small businesses. The LTB delays and the ever increasing cost of being a housing provider are pushing many small landlords to exit the market and reduce the stock of available rentals in Ontario.
Small Ownership Landlords Ontario (SOLO) aims to represent the interests of small landlords in Ontario facing with delay and lack of support.
