In an unprecedented move, the government of Ontario will
freeze rents on rent-controlled apartments throughout the province in 2021.
This was announced by Minister of Municipal Affairs and Housing Mr. Steve Clark
in the last week of August and
is great news for a common man.
This is a great initiative for the people as most of them are
in dire need of such steps to be taken. This effectively means that we can
expect the same rent throughout the next year across the province of Ontario,
including Toronto.
But have you thought about what will happen to people you have
invested in real estate and depend upon the rentals? Let me offer you some
insight in this regard and what will happen to people.
Impact on the Real Estate
If you think that such a drastic step was the need of the
hour, then you are right. But what about people who have invested in real
estate and will be solely dependent on it? This is that the government must
have thought about before making this decision. So, what will be the effect of
this decision on the real estate market in the province of Ontario, and
especially the city of Toronto? This is the million-dollar question everyone is
talking about.
The real estate market is like most of the other businesses
and relies on positive news and sentiments. While this is positive news for the
people at large, for the real estate owners, this means that for the whole next
year, they will not get any increase in the end. Some of them may be expecting
an increase in the rent right from the first month of the year. But now, before
January 2022, it is not possible.
Let me talk about the perspective of the people looking for a
condo or an apartment for rent.
People Living in Rental Places
For everyone looking for a piece of real estate for rent, this
is great news. Now they don't have to think about increasing rent prices, which
can be a burden for people who don't have a good job, or in the worst case, are
unemployed. They will have a sigh of relief and don't have to think about
arranging any extra amount for rent.
The people who are the sole breadwinner for their families, their
woes, at least in this aspect, have been taken care of by the government.
According to the estimates by the government, about 1.6 million rental
households in Toronto will benefit. Amidst all the negative news about the
economy, there can’t be better news for the people, especially involved in blue-collar
jobs.
A Troublesome News for the Investors
For the people who have invested their hard-earned money in
the field of real estate and are dependent on the income from the rentals,
there can’t be more bad news for them than this one. A person who will not get
any increased or extra income throughout the year will rue his decision to
invest in a prestigious project like 50
Yorkville Ave. Surely, they will earn income, but the steady
increase that they have anticipated for the year ahead will not come.
Many people make plans about investing the money that they
will get on other projects. But you can think about what will happen to them.
They are not going to get any extra income for the whole year. The investors in
the real estate market present less than 10%, overall people. Still, this is a
sizable percentage of the population that will be affected by this decision.
Over to you
All of us will know about the true impact of this decision
after a few months have passed in 2021. Till then, we’ll keep our fingers
crossed and hope for the best. For investors, though, this will be one of the
toughest periods of their lives as the economic downturn and adverse scenarios
for the whole country will make any chance of recovering for them more
difficult.
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