With the recent announcement by Doug Ford regarding new home builds in Ontario, new construction in residential areas seems to be on the rise, and fast! Those looking to invest in real estate in the coming years will experience a number of effects if this bill is approved, so it’s worth understanding what it is proposing. While this housing increase might draw questions about whether having too many homes available will dilute the rental market for investors looking to fill their rental properties, there are many signs that rental units will be in demand for years to come.
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The Ontario government recently announced a new initiative that should see the building of 1.5 million homes in the next 10 years across 29 different municipalities in the province, many of them in and around the GTA.
The goal of this bill is to increase the availability of affordable housing by changing the definition of what ‘affordable housing’ is, and by making it easier and cheaper for developers and homeowners to create housing opportunities for potential renters.
This new legislation proposes a number of changes to current legislation and bylaws including:
- A reduction of fees on affordable housing developments
- Allowing for more development on a single lot without additional bylaw amendments
- Reduced development charges for rental builders
- Increased housing density near transit stations
- Encouraging the use of surplus government land for housing
- and increased use of modular homes and rent to own programs for renters
The proposal, called Bill 23, raises a number of questions for future real estate investors, but does give hope to those looking to invest in new properties to use as rental units. With reduced fees and lowered permitting requirements, developers and homeowners will be able to more easily create opportunities for rental units on their properties.
More homes on the market
With so more homes hitting the market in the coming years, it begs the question whether there will soon be a reduction in average rental price that could negatively impact real estate investors. This is a valid concern, but investors can rest assured that any effects from this bill will take quite some time to have an effect, if they ever do.
More available housing may stabilize rental prices in the long term but until these homes are built and ready for renters, rental prices won’t be affected. There is still plenty of time for investors to choose a property to purchase and put it on the market before an increase in available housing will affect anything.
Condos remain a strong addition to a real estate profile
Condo units are still an excellent investment choice for many real estate investors. Young professionals are back to working in the office, adults are looking to downsize in order to move onto their next phase of life, and young couples and families just starting out are constantly looking for these smaller units.
Whether investors are looking to purchase a property in order to get renters in and create a regular rental income, or they want to flip the unit after the price has appreciated, condo units are a smart choice. This home style often comes with lower rent, reduced utility bills, and several included amenities, making the option more financially manageable for a number of buyers and renters.
With the option of buying a pre-construction condo or an already existing unit, investors are able to decide which one is most likely to meet their portfolio goals, and help them create a profit.
Real estate is a strong investment choice
Buying a condo, townhouse or house as an investment property is a good move for those looking to build a solid investment portfolio. Even as the number of homes on the market increases, there are always potential renters looking for a place to call their own.
For those looking to enter into the world of real estate investing for the first time as well as those who are already experienced in the field, the current market is a great time to get in. With selling prices stabilizing and interest rates still low, buyers will be able to invest in a property at a rate that will still allow them to turn a profit when they rent or sell down the road.