Rental property owners under pressure with rising interest rates
Radio-Canada published an article in which the difficulties of rental property owners are represented and in which CORPIQ's Director of Public Affairs and Government Relations offered his testimony on this situation that has been going on for several months. Many landlords are faced with a rapid increase in the Bank of Canada's key interest rate since January 2022, which inevitably affects their mortgages, especially those with variable rates.
CORPIQ is well aware of this situation, notably through the numerous exchanges and meetings with its members. Witnessing this unfavourable economic situation for both landlords and tenants, CORPIQ is concerned and is seeking to further document all the repercussions and future consequences on the rental housing stock. "More and more landlords [often owners of buildings with 5 units or less, editor's note] are forced to dip into their personal income to balance the management of their real estate stock," reads the article, which quotes Marc-André Plante, Director of Public Affairs and Government Relations at CORPIQ.
According to one of our recent surveys, nearly 60% of our members have a variable rate mortgage, and nearly 80% of them have a mortgage that exceeds half the value of the property. These situations are worrisome since, according to members, some want to try to reduce their investments in the short and medium term.
Thus, we should not be surprised to see significant rent increases over the next year, especially for new buildings, as Section F allows for rent increases regardless of the rent setting criteria (over a period of 5 years after the building is constructed). However, municipal tax increases will affect all tenants as it is transferable through rent renewal.
We invite you, dear members, to share your reality that deserves the attention of decision makers. Your perspective is essential to ensure that the issues are understood and then addressed in the best possible way. You can add your comments and react through our social media posts (especially on Facebook) by clicking on the icons in the top menu of our website.
Source of the Radio-Canada article: La hausse des taux donne le mal de bloc aux propriétaires de plex