The Canadian island you’ve never heard aboutSeptember 17, 2018
Since 2005, the demand for housing in the Greater Toronto Area (“GTA”) has been rapidly outpacing supply. This is primarily a result of the limited amount of developable land due to what has been otherwise known as the ‘island’ effect.
The island, as the image suggests below, is the GTA, which is encompassed by a designated greenbelt of protected/undevelopable land. The greenbelt limits the developable boundary around the GTA to the north, east and west, while Lake Ontario prevents southward expansion.
This limitation of land supply for new builds, coupled with a growing population – more than 200,000 new Canadians who migrate to the GTA annually – are putting an upward pressure on demand in the apartment rental market.
Affordability of home ownership within the GTA and surrounding areas continues to be a challenge for many prospective home buyers, which is also putting upward pressure on demand for more affordable housing options, such as apartment rentals.
Since housing is a product of necessity, the demand for apartment rentals continues to grow and outstrip supply significantly. This imbalance of demand and supply is expected to continue due to the continued challenges of adding new supply with limited developable land.
With the current market being well-positioned for investors to capitalize on this demand and supply imbalance for rentals there is no better time to invest in private equity investments focused on the apartment multi-residential sector in Ontario.
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