Housing crisis continues
The housing crisis in Montreal and surrounding areas continues to expand. Is there really such a shortage, or are landlords inflating prices because they feel tenants are vulnerable to exploitation?
The housing crisis in Montreal and surrounding areas continues to expand. Is there really such a shortage, or are landlords inflating prices because they feel tenants are vulnerable to exploitation?
Ephraim 17:51 on 2021-04-04 Permalink
Or do you think that maybe as the price of property increases, they want to be able to cover their mortgages? The repairs? The insurance? The heating? Property taxes?
The general CPI for Canada in February was 138.9 and yet homeowner’s insurance is at 267.7. Maintenance and repairs at at 144.1. Fuel oil (for those with oil heating) is at 221.3.
The thing about tenancy is that it’s not as with commercial rent, NetNet. The landlord still has to pay property insurance on the property, the landlord has to buy insurance on the building and liability insurance, the landlord has to do repairs. And it depends on the tenant how involved those costs are… most landlords don’t have to deal with bugs or rodents, but in larger buildings, get one problem tenant and you have to deal with those costs repeatedly. Is heating/electricity included? As I have pointed out, even condo buildings that didn’t divide the electrical when they converted are problematic… no one closes the lights when they don’t have to pay the bill. Who should pay when the plumbing is clogged? And should the tenant be calling the landlord when the plumbing is clogged? How about when tenants repeatedly pour grease down the drain?
It’s all costs. It’s one of the reasons that I think that over time, we may move more towards a leasing model… where the tenant is responsible for regular maintenance.
Kate 21:27 on 2021-04-04 Permalink
We may be having a real estate fandango lately, but I don’t think it means that mortgages set several years ago are requiring higher payments. Landlords know that tenants are cowed, and some are making hay on it.
Ephraim 21:42 on 2021-04-04 Permalink
Lately? It’s been like this for a very long time. The estimate on my home, purchased 12 years ago is a 285% increase. Even the down payment goes up by that amount… Remember that once house exceed $1M, the down payment is 20%… without exception. The mortgage payment will go up by more than double, assuming they can get the same low rate. And that doesn’t even include the increase in property tax that will happen. (And that’s based on a REALLY low rate… I have a discount of 112 basis points below mortage prime.