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Real Estate News: Vacancy Rates Climb in GTA

December 17, 2009

GTA vacancy rate up as many opt to buy homes

(Source: Toronto Star)

Renters lured by low interest rates into home ownership and a proliferation of condominiums competing with purpose-built apartments in the Toronto area have seen vacancy rates jump to 3.1 per cent from 2 per cent last year.

“The GTA rental market experienced softer conditions in 2009,” says Shaun Hildebrand, senior market analyst at the Canada Mortgage and Housing Corporation in a report released today. “This is a fairly significant increase.”

After a slow start to the year sales in new and existing homes are expected to surpass last year as the teaser of low interest rates have renters moving out.

First-time buyers represent a 57 per cent share of the market this year compared to 33 per cent in 2008, according to the federal housing agency.

“The flip side to home ownership is that you are going to have more vacancies,” says Hildebrand.

Many of those first-time buyers are moving into the condominium market, which currently has an estimated 35,000 to 40,000 units under construction. About half of that figure is expected to come on line next year, meaning that vacancy rates are forecast to be bumped up to 3.3 per cent in 2010.

Although condos are typically priced 40 per cent higher, “their new features, prime locations and high-quality amenities create competition,” said the CMHC. About 16 per cent more condos were added to the rental stock this year.

Another reason that vacancies are on the rise is that a high unemployment rate among younger workers means that many have opted to stay at home and out of the rental market.

Read the entire article “GTA vacancy rate up as many opt to buy homes” from the Toronto Star

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