" More than 80 per cent of new condo investors in the Toronto region are bleeding cash as the rental income from their units is not covering the increasing mortgage and costs of owning the property, according to a new report issued on Thursday.
The losses are dissuading investors from buying new condo units, also known as preconstruction condos because they have not been built yet, the report said, contributing to the lowest sales in 27 years in the first half of this year.
The preconstruction condo market is “clearly in recessionary territory with conditions deteriorating to levels not seen in decades,” said the report authored by condo research firm Urbanation Inc. president Shaun Hildebrand and Canadian Imperial Bank of Commerce deputy chief economist Benjamin Tal.
The report found that average monthly ownership costs for new condos in the Toronto and Hamilton region have climbed to $3,250 due to the higher cost of the newly built properties, borrowing and other expenses. That is 21 per cent higher than in 2022 and 54 per cent above 2021.
At the same time, the average monthly rental rates for a new condo in the region hit a record $2,700. But that was not enough to cover the new condo investor’s expenses.
Many more investors are paying out of pocket to cover the costs – a situation known as being “cash flow negative.”
https://www.theglobeandmail.com/busi...sing-money-on/ July 25 2024
A smart reporter would be all over this and looking at the financing in HRM
When the feds finally decide to cut immigration what will happen to the Canadian housing market ?
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