Housing Investors Are Getting Flushed Out as Canada’s Rates Rise
As small-time landlords are squeezed, so are renters. It could all signal a fundamental realignment of the country’s housing landscape.
The historic jump in borrowing costs is burning Canadian investors who entered contracts years ago to purchase properties directly from developers before they were built.
Photographer: Kamara Morozuk/Bloomberg
It wasn’t long after interest rates started rising again that some of the small-time real estate investors who form the backbone of Canada’s rental market began to fear they could get sued.
Toronto-based attorney Mark Morris has been getting calls from them since July, and their circumstances are all roughly similar: They entered contracts years ago to purchase properties directly from developers before they were built. They were betting that by the time the homes came online, the market would have risen and what they’d agreed to pay for their new investment would look like a bargain.