2024-01-16 01:13:24
Due to lack of profitability, many owners have decided to sell the condos they were renting, thus contributing to the record reduction in the number of rental units on the market at the end of 2023.
This is what the Corporation of Real Estate Owners of Quebec (CORPIQ) observed. According to the corporation, hundreds of tenants received a repossession notice last December.
“We have never seen so many people wanting to sell their rental condos, it’s a real epidemic, and unfortunately, even an improvement in the mortgage rate situation will have difficulty resolving the chronic lack of profitability, since the equation has become impossible to resolve,” explained the director general of CORPIQ, Benoit Ste-Marie, in a press release on Monday.
The situation is also observed with small plexes, buildings comprising one to four rental units, said CORPIQ. High interest rates are largely responsible for this reduction.
“Almost 100% of sales transactions result in a recovery, the rental vocation being now unviable,” said the corporation.
The rental condo market was already in difficulty before the interest rate increase, due to costs related to insurance and condo fees.
“Already before the rise in interest rates, many rental properties were in deficit; with the rise in rates, rental condo owners no longer have the choice but to sell, because losses easily reach $400 to $500 per month, an untenable situation after a while,” added Benoit Ste -Married.
This unprofitability of the rental sector should lead to an ever greater withdrawal in 2024, fears the general director, which will continue to fuel the housing crisis.
In Quebec, 85,000 condos are rental, out of the 400,000 listed. Over the next five years, 20% of condos are expected to leave the rental market, representing a withdrawal of 17,000 housing units, detailed CORPIQ.
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