Jan 28, 2003 - Home ownership the goal of most renters

January 18, 2005

January 28, 2003

Home ownership the goal of most renters

Toronto – Most renters would prefer to own, and more and more of them are getting that opportunity, according to the new head of the Toronto-area home builders.

Speaking at the annual president’s dinner of the Greater Toronto Home Builders’ Association last night, Joe Valela cited today’s unusually high rental vacancy rates as evidence that the housing market is working. The current vacancy rate of 2.5 per cent is up from 0.9 per cent in 2001.

The president of Valemont Homes takes the reins of the 1,100 member company strong GTHBA following an all-time sales record of 54,792 new homes in 2002 and the sixth consecutive year of record-breaking sales results.

Between 1996 and 2002, home ownership in the Toronto CMA rose 3.2 per cent, representing 150,000 households. By 2004 the ownership rate is expected to climb to almost 66 per cent of all homes. "We need to be vigilant and forceful in opposing any policies that might undermine the market and impair its extraordinary productivity. The challenge now is not to mess it up," he said.

"Perhaps the most significant political and social phenomenon of recent years in the GTA is today’s growing supply of rental units. Unbelievable just a few years ago, some landlords today are offering incentives to renters," he added.

Valela attributed this reversal to the fact that more and more renters are opting for home ownership, thus freeing units, and the fact that as many as 35,000 condos in the GTA are rented out, adding significantly to the supply of rental units.

Late last year, the Association commissioned a survey of more than 700 Ontario renters. More than half (52 per cent) of all renters reported that they intend to become homeowners in the next five years. Even those who can’t muster the down payment still express a desire to put their money into ownership and not into a landlord’s pocket.

As many as 70 per cent of surveyed renters said they would be more likely to pursue ownership if there were better government incentives available.

Valela called on the federal and provincial governments to heed this widespread desire for home ownership and to support the trend rather than falling back on policies such as rent controls that distort the market and lead to low vacancy rates.

He recommended two policy options: a tax-free savings plan along the lines of RRSPs and tax deductions for mortgage interest.

"We don’t need a wide-open program like the U.S. has to deduct mortgage interest and property taxes," he said. "A limited-time, targeted program would be a strong incentive to help renters buy."

Valela also noted that there is a provincial home ownership savings plan that has been around for 15 years, but that not a single renter in the survey had heard of it. "This is amazing to me and suggests that it’s either a poor program or it’s poorly marketed."

For a copy of the speech and background information, please contact
Suzanna Cohen, Director of Communications at 416-391-3450.