“We need a combination of lower rates, higher resale prices, and higher rents for the math to work again for investors,” Urbanation's Shaun Hildebrand tells STOREYS.New condo launches have been sparse in the Greater Toronto and Hamilton Area amid the higher interest rate environment. In fact, there wasAnd it seems that things have gone from bad to worse. Much worse.
Speaking to the latest data, Hildebrand tells STOREYS that, to his knowledge, eight condo projects have “officially” been cancelled, translating to 741 new housing units that will never come to market. “There are quite a few more that are on the cusp of cancelling and we are just waiting on official confirmation, with more likely to follow,” he adds.
For that group, the math simply doesn’t work right now, the report says. Investors tend to rely on rental income, which has begun to lag behind the costs associated with condo ownership. The report shows that “using the entire pool of condo rentals completed last year, 58% had a mortgage and were cashflow negative” — in other words, rents did not cover ownership costs including mortgage, condo fees, and property taxes — while “only 18% had a mortgage and were cashflow positive.
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