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    At Robert Floris’ Mortgage Architect’s office in Hamilton, we are already waiting to spot the next trend.  In 2004 (thirteen short years ago), the vacancy rate in Toronto was over 4% for residential rental housing.  As the Bank of Canada 5 year bond yield dropped below 4%, it must have reached an inflection point with the Public.  The renters were saying hey why not buy?  Needless to say, as Canadian mortgage rates were suppressed, more Canadians were able to buy their first home and give up renting.

    Today the same Government of Canada five year bond yield has tumbled to 1.23%.  This is very good to a point, cheap money is great but now home prices have gone on fire in the Toronto and Hamilton area.  This with increased house prices, rental rates in the GTA are now down to 1.25%.  With more Canadians entering the affordable range of housing, look for the cycle to change and developers building new rental buildings and other redevelopment of rental units.

     

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