The Scenario Investors Will Face Next Year as Rents are Going to be Freeze in 2021

 

The Scenario Investors Will Face Next Year as Rents are Going to be Freeze in 2021

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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