Has anyone been looking for a new place this season? I have and let me tell you, the rental market has gone mad cow. Six or seven years ago, we had a shortage of places for rent. When you visited an apartment, it didn’t matter if you liked it or not, as long as it was in your budget, you took it because you just didn’t want to end up homeless and back to mommy’s house. I mean it has it’s perks to be back home, no rent to pay, hot meal waiting for you and your laundry is always done. But let’s face it. Once you are gone from the family nest, you wanna stay gone. Not very much of a winner if you try to impress your date by bringing her in your single bed covered with spiderman sheets.
Today, it’s the complete opposite. There are tons of places to choose from but the brutal rental prices have gone off the roof. With the explosive growth of condos all over the city and the low interest rates, almost anyone can now own a piece of the pie. And the current landlords actually think that their old run down dwellings are worth what they are asking for. But do they realize that if we can afford their ridiculous fees, we’ll end up buying instead. And why not? Why pay for something old that doesn’t even belong to us when we can purchase a beautiful newly built home in a state of the art building with all the extra conveniences (pool, lounge, terrace, gym, etc…)
You might think the winner in all this is the buyer and not the renter. Actually, they both lose in a way. Give it some time and the financial market will eventually go up. That little miserable 3% interest rate that everyone is enjoying right now might rise at some point. And when it does, most owners will lose their shirts because they are already maxed out on what they can afford. 1% or 2% might just be enough to drown them.
A lot of condos will end up vacant from foreclosure, owners will have to find somewhere else to live, but the price of rentals will remain up there. And the inevitable will happen again, not enough rentals to satisfy the demand but this time they will be out of budget. So in the end, we all lose. So to all the parents out there, that extra room you gained when your offspring left the nest and that you have planned to convert into your room for the spa, I’d hold off on the plan just in case…