Housing Bubble Fears Are Causing A Rental Housing Boom

By Ben Myers

Fear is a powerful motivator. Fear of losing money is an extremely powerful motivator. Many homeowners have the majority of their net worth in their homes, and countless prospective buyers are contemplating using most of their life savings to buy their first property. It’s no surprise then that an article or blog post that plays on those two fears — fear of losing money and the housing market — will be well-read.

Real estate content has broad appeal because everyone needs somewhere to live — throw in warnings about massive price corrections, increasing foreign buyers, rabid oversupply, city-altering high-rise condominiums and neighbourhood-dominating McMansions, and you’ve got a popular, well-shared article. There is a piece broaching these subjects that gets well-circulated at least every other day.

I believe that these articles are influencing young people to rent, and current renters to stay away from homeownership. These warnings of a housing correction are not new, but the frequency has increased and several other factors are at play. A couple of southwestern Ontario markets (most notably Toronto) and the Vancouver metro area are pricing out first-time buyers. In other major centres across Canada, the flatness or slowing of house price appreciation has dissuaded potential buyers from jumping in.

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