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Renters might soon feel the pain as their landlords post losses. Here’s why

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real estate investors might ratchet up the pain in the rental market in the coming years.The report, released Monday from CIBC and Urbanation, shows that for a majority of real estate investors in the Greater Toronto Area (GTA), the business case for their rental properties is falling apart.

Industry observers say similar pressures are being felt in other major cities like Vancouver.While tenants might have little sympathy for the landlords who, in many cases, have been rapidly raising their monthly rents in recent months, experts who spoke to Global News say investors are critical to the supply of units in the rental market.With investor demand for new builds potentially dampening, renters could face even steeper costs in the year ahead, says Urbanation’s Shaun Hildebrand, one of the authors of this week’s report.Urbanation and CIBC found that, for the first time since it undertook the annual study in 2017, the majority of investors (52 per cent) in the GTA were cash flow negative for their properties in 2022.What that means is that the income generated by rents didn’t cover off the owner’s mortgage, property taxes and condo fees, and the investor likely loses money on a month-to-month basis.Hildebrand says while Urbanation’s formal probe into these questions only began in 2017, last year was likely the first time in the “modern era” of condo investing over the past two decades or so that most investors started to see negative cash flows.He tells Global News there was one fundamental shift in the market that led most investors to swing to a loss: the Bank of Canada’s rapid rise in interest rates, which has seen borrowing costs soar for many mortgage holders.A Royal LePage survey published last week showed that nearly.

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