I can only speak from my perspective as an American, so I don't fully understand the political climate in Canada. What's the likelihood of laws being changed to prevent rent increases in line with this inflation?
Thanks for posting this. As an investor in residential REIT's, though this is bad for renters, this is good for some of the REIT's out there like Capreit & InterRent who are capped at rent increases for roughly 80% of their population (since around 20% churn each year) so a potentially good investing opportunity here. What you are showing here are the same rent increases as we had in the early 90's, so the increase is not without precedent.
One interesting thing for next year will be whether the provincial government will revise the methodology in response to this inflation increase. It's an election year for Doug Ford and it's easy to hate on landlords and pass populist statements that he will limit rent increases like they did during 2020.
Yeah that’s a great point. I think it’s very likely that if this gets enough focus, the parties in Ontario will do another rent freeze. They might frame it as a price-control measure to lower inflation or a matter of fairness. If they don’t though, rent inflation is running ahead of wages so it will pull average rents toward market rents which as a matter of efficiency and fairness among renters is a good thing.
I can only speak from my perspective as an American, so I don't fully understand the political climate in Canada. What's the likelihood of laws being changed to prevent rent increases in line with this inflation?
Thanks for posting this. As an investor in residential REIT's, though this is bad for renters, this is good for some of the REIT's out there like Capreit & InterRent who are capped at rent increases for roughly 80% of their population (since around 20% churn each year) so a potentially good investing opportunity here. What you are showing here are the same rent increases as we had in the early 90's, so the increase is not without precedent.
One interesting thing for next year will be whether the provincial government will revise the methodology in response to this inflation increase. It's an election year for Doug Ford and it's easy to hate on landlords and pass populist statements that he will limit rent increases like they did during 2020.
Yeah that’s a great point. I think it’s very likely that if this gets enough focus, the parties in Ontario will do another rent freeze. They might frame it as a price-control measure to lower inflation or a matter of fairness. If they don’t though, rent inflation is running ahead of wages so it will pull average rents toward market rents which as a matter of efficiency and fairness among renters is a good thing.