The latest news about the real estate market is enough to make anyone dread turning on the TV or even opening up a web browser. High prices, and interest rates that will knock your socks off, what’s next? For many first-time buyers, the dream of homeownership seems to be slipping further and further away in light of news of astronomical prices and not enough houses to meet the growing demand.
Fortunately, it’s not all doom and gloom, as governments at all levels are starting to wake up to the crisis. As we speak, plans are in place to combat the shortage and make housing more affordable, both to buy and to rent. Will it be enough to help the newest generation seeking a home of their own? Let’s start with a quick look at the rental market.
A Snapshot of Peterborough’s Crowded Rental Market
Peterborough currently has the lowest vacancy rate in Ontario. This is the result of newcomers to the city combined with a shortage of purpose-built rental apartments. An annual influx of students at Trent University and Fleming College also agitates what is already a crisis situation. For investors, this is fantastic news as it all but guarantees a ready pool of eager tenants. Anyone looking to rent a house or apartment in Peterborough could be in for a challenge, however. More homes alone won’t help the situation if those who need them the most can’t afford them.
Peterborough needs to act, and it needs to act fast. Fortunately, Peterborough is also a city with a plan. Here are a few measures currently in the works to make rental housing more available and affordable.
- Peterborough will receive $2,457,000 to help create 63 community housing units to support vulnerable individuals in the community.
- Hunt Terraces at 555 Bonaccord Street will have 85 units, 65 of which are dedicated to community housing.
- A multi-storey building at 681 Monaghan Road will provide 53 affordable units.
- A $30 million credit by Vancity Community Investment Bank (VCIB) working with Habitat for Humanity Canada to support the construction of 414 affordable housing units throughout the community.
- Peterborough Housing Corporation will include the repair of 945 homes, 20% of which will be accessible.
What is it like to buy a house in Peterborough? Learn more in the posts below:
- A Guide to the Current Peterborough Housing Market
- A Walk Through the Neighbourhoods of Peterborough
- What to Know Before Buying Vacant Land in Ontario
How Does the Housing Shortage Affect Buyers?
When you stroll through the streets of downtown Peterborough or one of the peaceful residential neighbourhoods, it’s easy to see why so many people are attracted to our beautiful city. Peterborough is full of breathtaking parks and trails, and the list of exciting festivals and events is endless. In addition, a thriving education system and outstanding job opportunities draw new residents from all over. We could go on (and we usually do), but that’s for another time!
For now, it’s enough to know that houses in Peterborough are in high demand, and there’s not enough of them by far. Those with the means to buy are at an advantage over those looking to rent. Still, all three levels of government need to step up in their efforts to improve the supply of houses to purchase. Here are a few initiatives that are already beginning to shape up:
- The More Homes Built Faster Act: A provincial initiative to build 1.5 million homes by 2031. For Peterborough, the target is 4,700 new houses and 6,500 throughout Kawartha Lakes.
- Amendments to Local Bylaws: How can a city add significant numbers of available housing in a short time? In 2018, Peterborough passed a by-law allowing current homeowners to construct a secondary suite on their existing property. In 2023, a proposed amendment would allow for the addition of two residential suites. This could include a combination of a basement apartment, attic apartment, granny flat, or even a separate laneway house. With the ability to generate income, homeownership becomes more attainable. Plus, this amendment adds to the badly needed supply of rental units.
- Habitat PKR’s Homeownership Program: An initiative by Habitat for Humanity Peterborough & Kawartha Region to construct 41 affordable homes for purchase.
Should you choose Peterborough as your next home? Find out how it compares with other cities in the posts below:
- Peterborough vs. Other Small Cities in Ontario
- Living In Toronto Vs Peterborough: What’s Better?
- 6 Peterborough County Towns You Have to Know About
Tips for First-Time Buyers
In addition to the initiatives above, first-time home buyers can take advantage of several government programs aimed at increasing the number of owners in Canada.
- First Home Savings Account: The newest initiative allows Canadians aged 18 and over to save $8,000 per year to a maximum of $40,000 to put toward a down payment. It may not seem like much, until you remember the effect of compound interest. Any growth in the plan also goes towards your purchase. Like any investment, it is best to start as young as possible.
- Home Buyers’ Plan: Under this plan, you can withdraw up to $35,000 from your tax-sheltered investments to put toward your purchase without tax penalty. You must then repay those funds within 15 years to maintain the tax benefit. If you combine the Home Buyers’ Plan with the FHSA, you will have as much as $75,000 towards your home, plus any dividends your account earns. If you are buying with a partner who is also a first-time buyer, you can both take advantage of these plans, potentially doubling their benefit.
- The First Time Home Buyer Incentive: The federal government will provide 5% towards the down payment of a resale home, or 10% of a newly constructed project. The incentive functions as a loan that is paid back when selling the home or after 25 years. Though there is no interest, the government is entitled to a percentage of any increase in value, to a maximum of 8% per year. Though it’s not likely that your house will lose value, you are protected if it does. In that case, the loan is then repaid minus 8% of the loss per year.
There is no question that first-time buyers and homeowners are facing unprecedented challenges. However, with these incentives and initiatives to address the shortage, we all have reason to be cautiously optimistic about the future of Peterborough.
Do you have questions about buying or selling a home in Peterborough today? We have faced every challenge under the sun and are happy to guide you through the process. Reach out to team@jeffandkatie.ca or call 705-243-9797 for more information or to get started.
