Latest / Kvetch & Release / New report highlights the reality of renting & home buying hurdles in Ontario

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New report highlights the reality of renting & home buying hurdles in Ontario · Kvetch & Release

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  Do you know that one third of Ontario renters plan to purchase a property in
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  the next two years? Does that sound like you. Of those planning to
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  purchase, forty three percent believe they will be able to afford to buy a
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  property in their current city of residents. Forty three percent believe that they'll be
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  able to afford in their own city of residents. Are you one of these
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  people? Text us at five one nine seven nine two CKLW let us know
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  and we'll get to those comments throughout the rest of the show. Joining us
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  to discuss a twenty twenty four Canadian Renters report that's put out by Royal Lapage
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  is Karen Yolevski, who is the chief operating officer for Royal Lapage. How
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  are you doing today? I'm good, Thanks for having me. Thank you
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  so much for joining me. Why don't we talk a little bit about what
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  the realities are for people who are both renting and home buying and what the
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  hurdles associated might be here, not just you know, in Windsor, but
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  also across Ontario. What's the reality like out there? Well? Not surprisingly,
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  those rents that said they were not planning on buying a property in the
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  next couple of years. The reasons for that primarily were financial, either that
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  they could not come up with the down payments, or they didn't believe that
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  they'd be able to afford the monthly mortgage payment, or just simply didn't qualify
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  for the mortgage. It's a tough situation. We've talked here often about housing
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  expert Mike Moffatt, who discusses, you know, drive to qualify, coming
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  from the GTA down the four to oh one and stopping in whatever community that
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  they began to qualify for a mortgage in. It's a tough situation. It's
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  not one that it was like, you know, ten years ago, let
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  alone twenty thirty forty years ago. Well, prices have certainly risen in the
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  last ten years, and if you go back further you can see any prices
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  that have risen dramatically in the triple digits percentage numbers. People certainly do drive
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  to qualify, and now we're seeing people driving also to find more affordable rents.
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  For people are willing to go further to get out of places like the
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  GTA in order to find a roof over their heads. In terms of our
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  survey, we did ask people when they said, if you could buy in
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  your current location, great, but if you couldn't, how many kilometers did
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  you have to go out of your current place of residence to get within your
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  budget? And we had a large number of people forty percent combined that were
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  over fifty kilometers. Twenty percent of those people said over one hundred kilometers.
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  So that's really picking up and moving from one city to another. Well,
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  that it really is. You're talking about significant moves just because you can't find
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  somewhere to live in your own area. If you're not able to afford a
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  down payment to be able to get a house, or you can't qualify for
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  it, and you're being kept in the renter's market, that of course causes
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  the rental market to increase. It's a compounding effect, isn't it. That's
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  right, and we have seen that. We've seen that certainly in the Windsor
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  area over the last number of years. They're sort of hypercharged after COVID and
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  vacancy rates really are a big driving force behind that. A vacancy rates right
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  now now in winter around the two percent range. So you're talking about not
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  a lot of properties available to rent, and when you don't have supply.
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  You've brought all that demand, you're going to see those rental rates increase.
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  And so what are we looking at when people are spending the money that they
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  make on a monthly basis in terms of their rent. Do you have anything
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  like that broken down? Yeah, So our survey does ask how much are
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  people spending on their rent when it comes to their overall income and perhaps not
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  a surprise, Ontario and British Columbia coming out ahead on how much people are
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  spending of their income. So unfortunately you're looking especially when you move into the
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  bigger cities, you've got people spending In Toronto as an example, nineteen percent
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  of people in Toronto surveyed spend more than fifty percent of their income on rent.
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  Wow, that is stat I mean you wonder how people are able to
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  pull that off. So when you look at the situation down here in Windsor
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  specifically, do you think that any relief is going to be coming or how
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  long do you think we're going to be in this situation we're in, Well,
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  relief really comes through supply, more supply that can absorb the increase in
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  demand. We know we've seen record immigration as late, and that is particularly
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  for rental properties, impacting that demand because typically people who are new to a
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  province or to a country, they're going to rent first before they buy.
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  Now, we thought there were some good news in terms of purpose build rental
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  completions. Builds were above the five year average in the Windsor area. However,
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  the rental stock overall has actually diminished in the last couple of years after
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  you account for demolitions, renovations, and conversions of existing stocks. So we're
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  just not building fast enough to keep up with the overwhelming demand. The problem
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  with the generational change is that it takes Sometimes you can really quickly get into
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  it, but it takes a lot longer to get out of it. How
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  much of this is still just like hangovers from COVID and people deciding to up
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  and move for various reasons versus just you know, inner city people that have
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  been you know, sort of squeezed out, don't I really don't know how
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  to phrase what I'm asking other than again, like when when we're looking at
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  this situation and how it hit so heavy and so quickly, it just it
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  seems like it should be able to have some way to get out of it
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  as fast as possible, but why is it able to hit as hard as
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  it did so quickly. Well, it was COVID and the demand for housing
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  driven by COVID. People had a lot of focus on housing during the pandemic.
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  We saw the home take precedence for everything, right. It was the
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  point of entertainment. It was your gym, it was your office, it
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  was really the focal point of your entire life for those two years. Coupled
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  with the lockdown, that had people saving money and for ultra low interest rates,
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  interest rates we've never seen before in this country, and that really sparked
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  the market that was already undersupplied and has seen price acceleration over a number of
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  years prior to that. So COVID wasn't the reason, but it certainly did
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  add a little bit of fuel to that fire. And what we've seen post
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  COVID is that even though prices have come down off the peak, which might
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  be welcome news to a number of people, they studied themselves after the first
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  few months when interest rates started to rise, and they're slowly but surely creeping
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  back upwards. So we haven't seen drops and prices that have leveled the playing
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  field, particularly for first time buyers. Now, we do know the buyers
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  are getting creative. Buyers are looking at alternative forms of down payments, They're
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  getting together with family members, friends, They're looking to buy properties that way,
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  and a number of people are relying on gifts and inheritance in order to
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  purchase property. So even though we're in this housing supply shortage, the desire
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  for people to become homeowners isn't going away. It's just going to be more
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  difficult. The dream of home ownership in Canada is certainly not dead. I
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  thought it was striking that in our survey of the people that said in the
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  next two years they intend to buy that are currently renting, forty one percent
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  of people between the ages of eighteen and thirty four answered that yes. So
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  it's our younger people that are saying, yes, we are wanting homes and
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  we are planning on buying homes despite the obstacles that are in the way of
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  first time buyers. Well, it's the way that it's been for a pretty
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  long time. It's not surprising to see that trends and beliefs and opinions about
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  it haven't changed as well. Even though the climate has become far tougher than
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  it was just a few years past. Karen, I want to thank you
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  so much for breaking down this report. Pretty heavy stuff sometimes, which is
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  why we always love having experts come on to help discuss it well my pleasure.
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  Thank you for having me. Thank you very much. Karen Nielevski is
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  the Chief operating Officer of Royal Page. We are going to take a quick
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  break right now. We'll get to your comments. If you've got any comments
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  about anything from the past couple hours, feel free to call or text in
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