New government efforts expected to boost rental construction in Canada

Michael Waters, Minto Group CEO, stands at 88 Beechwood Ave., the site of one of Minto’s new apartment developments, in the New Edinburgh area of Ottawa on Oct. 12.A pair of recent government initiatives aimed at boosting rental housing construction are critical, the industry contends, after developers had put projects on the shelf because they were becoming cost prohibitive.

One new initiative cut the 5-per-cent goods and services tax that developers are required to pay after construction is completed. The tax is applied to the assessed property value of each rental unit. Ontario said it would also cut the provincial tax on new rental units, which along with the elimination of the GST would save developers 13 per cent on every new apartment unit.

Ottawa adds $20-billion to mortgage bond program to fund soaring demand for rental construction financing “It was getting to the point where borrowers were really worried about whether their financing would be there,” said Jason Ellis, chief executive of First National Financial, one of the country’s largest non-bank mortgage lenders.

“Think of the difference between paying 4.5 per cent on your term debt or paying 6 per cent. Many projects just wouldn’t work,” said Michael Waters, the chief executive of Minto Group, one of the country’s largest apartment developers and operators. “It makes a huge difference.”When real estate developers plan a new rental building, they borrow from a lender to finance the construction costs using short-term, floating-rate loans.

In 2001, CMHC established the Canada Housing Trust to buy MBS from lenders. In turn, it funds these purchases by issuing a new type of security: a Canada Mortgage Bond. The trust acts as a middleman, passing the cash flow from the MBS along to CMB investors, but restructuring it into more normal bond-like payments.

Source: News Formal (newsformal.com)

Canada Latest News, Canada Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Ottawa fire helmet the new Ottawa Senators win helmetThe Ottawa Fire Service presented the Ottawa Senators with a fire helmet for the team's new win helmet. Jakob Chychrun was all smiles as he was presented with helmet Saturday as player of the game.
Source: ctvottawa - 🏆 29. / 67 Read more »

NEW DATE: Bruce Springsteen's Ottawa concert now set for Nov. 9, 2024The original show date of Nov. 18 was part of a 2023 tour that was cut short in lat September for medical reasons.
Source: ottawasuncom - 🏆 4. / 92 Read more »

Ottawa Public Health contacting residents exposed to measles after Outaouais residents return from abroadOttawa Public Health says it is contacting Ottawa residents who were exposed to the measles after two cases were confirmed in residents of the Outaouais who returned to Canada from abroad.
Source: ctvottawa - 🏆 29. / 67 Read more »

Two Outaouais residents confirmed with measles after returning from abroad: OPHOttawa Public Health says it is contacting Ottawa residents who were exposed to the measles after two cases were confirmed in residents of the Outaouais who returned to Canada from abroad.
Source: ctvottawa - 🏆 29. / 67 Read more »

Two Outaouais residents confirmed with measles after returning from abroadOttawa Public Health says it is contacting Ottawa residents who were exposed to the measles after two cases were confirmed in residents of the Outaouais who returned to Canada from abroad.
Source: ctvottawa - 🏆 29. / 67 Read more »

Two Outaouais residents with measles after returning from abroad treated at Ottawa hospitalOttawa Public Health says it is contacting Ottawa residents who were exposed to the measles after two cases were confirmed in residents of the Outaouais who returned to Canada from abroad.
Source: ctvottawa - 🏆 29. / 67 Read more »