2017 London Real Estate Predictions Part 5
The City of London has been in an extremely busy real estate market since the spring of 2016, not only for residential resale and new build homes, also in the rental market. I’ve had a few friends and clients have a hard time finding suitable rentals this year. So how is a busy rental market going to affect the sales market?
With a vacancy rate in London hovering around only 2%, the residential real estate investment market is seeing a lot more interest from long time investors, as well as those new to game. New rental properties are also able to charge a little more than their counterparts, since the demand has gone up for them, and they don’t have to go by the yearly mandated rental increase percentage amounts. For Ontario, it’s 1.5% for 2017. This will make it a little more difficult for home buyers, since it’s more competition potentially to buy properties. There is a need for rental properties, and it is a good time for investors to find tenants more easily. The bonus competing with investors, is it’s typically about the numbers. A good investor isn’t worried about decor (to a certain extent) and shouldn’t be purchasing with their heart. If the numbers work for return on investment (ROI) and the timing is right, an offer gets made. With that in mind, investors typically don’t get involved in multiple offers going well over asking price, since it comes down to the financials. Unless something bigger is at play, like they need a specific property to help with a development opportunity, although that isn’t the norm.
One Floor Model Premiums
In Part 6 we will discuss why the one floor home is becoming an even larger premium in the London area. It won’t have the most sales, it will be the most sought after.