Development of purpose-built rentals slowing in GTA, says report
Purpose-built developments are still increasing but not at as much as before new Ontario Fair Housing plan, according to numbers from Urbanation.
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The number of new rental apartment buildings planned in the GTA is slowing months after rent control was expanded in Ontario, according to new numbers from real-estate market research firm Urbanation.
Nine new projects containing 1,719 purpose-built rental units were brought forward by developers in the second quarter of 2017. That compares to 2,453 units in the first quarter of the year, 7,323 units in the last quarter of 2016 and 5,645 units a year ago.
There are now a total of 30,400 proposed purpose-built units for the GTA, which includes projects that might not proceed as a result of new rent control, the report notes.
The province introduced its Fair Housing Plan in late April, a suite of measures designed to make housing more affordable. It included a measure to expand rent control to all units. Under the old rules, rent increases weren't capped in buildings built after 1991, an exemption developers argued was essential to incentivize constructing new buildings.
Shaun Hildebrand, Urbanation's senior vice-president, said the slowdown isn't cause for concern at this point.
The market, he said, is fundamentally strong but in a period of "transition." Purpose-built rentals are critical in a city where buying a home is still out of reach for many, he added.
"If supply isn't able to keep pace with that extra level of demand growth it has implications for rents," Hildebrand said. "The issue for renters is that the available supply that is coming up for rent is becoming very expensive and offered in a fiercely competitive environment."
Meanwhile rent is still rising, despite the new controls. Urbanation's report found the average price across the GTA is $2,073, up 10.7 per cent from a year ago.
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