On Thursday, the federal government announced the removal of GST on new rental construction. While a number of development sector stakeholders told STOREYS last week that the policy change is long overdue and stands to “move the needle” on new rental construction, some economists are cautioning that...
“While the removal of GST on rental construction projects will improve their financial viability — and with it, hopefully spur more development — it isn’t likely to lower rents in short order,” says one economist.On Thursday, the federal government announced the removal of GST on new rental construction.
In theory, more supply should help to quell competition and bring down rental rates, which, month after month, have“While the removal of GST on rental construction projects will improve their financial viability — and with it, hopefully spur more development — it isn’t likely to lower rents in short order,” she writes. “With Canada’s rental market in a severe deficit position, and given the time it takes to build new supply, the measure won’t be a silver bullet.
“It takes years to build multiple-unit structures, and the industry is already operating almost flat out,” he writes. “The all-time record high forPorter also draws attention tofrom the Bank of Canada, which indicates that the country’s homeownership market is increasingly being cornered by investors.
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