Should you invest during a housing shortage?
Housing shortage is a real problem in Ontario. This issue is complex and will not be solved overnight. The government is attempting to take action without visible success. Developers are struggling to build more housing because of various factors such as lengthy, complex and expensive process of getting the land and building design approved by the cities. In addition they are facing increased building costs and supply chain delays. The issues will not be solved anytime soon.
For investors like us that offer rental housing: on the positive, side demand could be good. And Ontario housing continues to be in tremendous demand. This keeps the vacancies low and rents can be increased. This means that rental housing is not going away or that rents will be going down because all of a sudden builders will quickly build a ton of new housing.
On the more challenging side if housing is in such demand finding investment properties that make sense has become more challenging. However, when we do find that investment property with great upside for our investors the risk of high vacancies or not hitting our target rents is significantly decreased. This forms a really attractive investment.
In summary, housing shortages for real estate investors is not a negative story and it can actually be a great opportunity to invest with even less risk.