Thursday, June 17, 2021

Canada Too..., We'll Rent You What We've Made It Impossible For You To Buy!!!

thestar |   A Toronto-based condo developer’s plan to buy $1 billion worth of single-family homes and use them as rental properties has sparked outrage from critics who say it’s an example of how corporations can profit from the country’s housing crisis.

Core Development Group, which develops and manages a wide range of real estate projects across Canada, said it plans to build a far-reaching single-family home rental business that will consist of 4,000 rental units in Ontario, Quebec, B.C. and Atlantic Canada.

The plan, first reported by the Globe and Mail, will target eight cities in Ontario — including Hamilton, London, Kingston, St. Catharines, Barrie, Peterborough, Cambridge and Guelph — before expanding outside Ontario by 2026.

Critics say the strategy mimics similar moves by American corporations in the aftermath of the 2008 financial crisis that bought swaths of housing stock and rented units to tenants while keeping the equity.

It’s called the ‘financialization’ of housing — where corporations and financial markets treat housing as a vehicle for wealth and investment rather than a social necessity, often to the detriment of individual homebuyers, says John Pasalis, president of Realosophy Realty.

“It’s hard enough for first-time homebuyers to get into the market. Now, they’re competing with billion-dollar investors who are just buying properties to rent them out, in a market where we’re not building enough single-family homes to begin with,” said Pasalis.

Real estate prices have soared during the pandemic, driven in part by low interest rates and rising demand. Toronto home prices jumped almost 30 per cent in May, to $1.11 million, while smaller cities and rural areas have seen increases as high as 50 per cent in one year.

Housing advocates have pointed to a critical lack of supply in single-family dwellings, forcing homebuyers to fight over the limited stock available while prices inflate. This problem is exacerbated, they say, by corporations that reduce the remaining supply by buying up homes and converting them to rentals.

“It’s wrong on all possible levels. It takes more properties out of our inventory, and can only do harm to an already-tight supply,” said Ron Butler, a mortgage broker with Butler Mortgage.

In an interview with the Star, Core founder Corey Hawtin defended the plans to purchase single-family homes, saying that the company is buying far less than one per cent of the homes that trade in the Ontario market on a yearly basis.

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