The Toronto rental market remains strong. As you move further along the 401, deeper into Durham Region, the market begins to slide. So it isn’t so much as whether this house is rentable as whether there is anyone out there who wants to rent. Durham Region isn’t enjoying strong full-time employment which tends to keep the rental market strong. A three bedroom apartment in north Oshawa, near the university, where friends can share space seems to be the only guarantee for finding a tenant.
What is keeping the tenants away? There are a few factors the Canada Mortgage and Housing Corporation (CMHC) take into account when deciding on rental market trends. Youth employment tends to encourage young people to stretch their wings into the rental market, leaving the nest. Full-time job opportunities have softened in Durham Region. Less youth are venturing away from home, or they’re heading into Toronto for jobs and apartments.
Opportunities for first time home buyers has also affected the vacancy rate. House prices have shown a slight rise; mortgage rates remain reasonably low; and housing starts remain strong in Ajax, Whitby and Oshawa. Many Generation X’ers are opting for home ownership.
Slower migration to Durham Region, due to the slower manufacturing sector, has also affected the rental market. New immigrants tend to be renters.
What does this mean to the fledgling real estate investor? It means you need to be smart about your real estate investment purchases. If current trends continue, the rent you will be able to collect from that 3 bedroom townhouse will likely not increase to match inflation. Keep an eye on your ownership costs as they can eat into your profit and select a rental unit where you can capitalize on the current demand.