The annual rate of return on rental housing has been 24% per year since 2005, calculated the Institute for Research and Socioeconomic Information (IRIS).
In a study published Tuesday, IRIS showed that the rate of return was three times the breakeven point of an investment.
In 2002, the Raymond Chabot Grant Thornton firm established the break-even point for an investment at 8% and estimated that rental housing in the Montréal agglomeration would not be profitable, since the return was between -5.6% and 7.3%, said IRIS.
- LISTEN to the interview with Louis Gaudreau, researcher at the Institute for Research and Socioeconomic Information (IRIS), at QUB Radio:
This return led investors to take an interest in the Montreal real estate market, which led buyers to speculate on the price of real estate.
“More and more households are forced to lend themselves to the game of speculation on the market value of their housing, when buying another house that better meets their needs”, gave as an example, by way of press release, Louis Gaudreau, professor specializing in housing at the University of Quebec in Montreal, which increases the wealth differences between owners and tenants.
According to IRIS, the median net worth of owner households was $ 551,000 in 2016 (up 81% from 1999), compared to only $ 22,400 for tenants (up 47% from 1999). ).
To limit the deleterious effects of this situation, IRIS proposed to review the calculation of property tax, by taxing the entire estate of a person rather than according to the value of each property, and to abolish the capital gain deduction.
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