The Rise Of Purpose-Built Rentals
The term “purpose-built rentals” has been especially utilized over the last couple of years, and while you may not be familiar with what it means exactly, these are rentals that are a driving factor for the economy right now.
With costs of detached homes in Canada ascending – specifically in Toronto and Vancouver – the demand for single-family rentals is increasing dramatically. The purpose-built rental apartment boom is just getting started.
“Single-family rentals are driven by this demographic wave that’s the new part of housing demand, which is the millennials moving from their 20s to their 30s,” says Robert Dietz, the National Association of Home Builders’ chief economist and senior vice president for economics and housing policy.
With 56% of the gains in rental housing stock from 2005 to 2015 coming from single-family homes, and now with the real estate market and costs at an all-time high, many developers are honing in on the production of full rental communities of purpose-built homes. The question is, Should they be?
There are a multitude of demographic and economic trends that support the demand for rental units.
It has been proven that millennials understand the benefit of renting over owning. A Harvard University Study found that those under the age of thirty will form over 20 million new households between now and 2025, the majority of those being renters. Knowing that millennials are looking to rent informs the fact that the amount of occupied single-family rentals will only increase as more millennials enter the housing market.
With increasing student debt, and tuition growing steeper, young adults don’t seem to have much of a choice but to rent, and they’re looking for an affordable rental.
Kerry Clare, Toronto-based writer and mother of two, says that she and her husband believe the pressure to buy a home is prominent, but that “Renting, for us, has been about neither lack of choice nor compromise, but instead about living the kind of life we want to live. Renting has given us flexibility and financial freedom.”
Working a lifetime only to pay off debt and save for a potential mortgage is no longer the ideal “dream.” Economically, it is becoming less and less attainable to become a homeowner, as prices become more and more unreasonable. The idea of an enormous investment in a property to call your own is no longer the “holy grail of retirement” that it was for previous generations. Rather, it appears that there may be a bright future for the development of purpose-built communities.