Could Real Estate Investment Trusts (REITs) be a solution to Canada’s housing crisis?
![Canada Mortgage and Housing Corp. says the annual pace of housing starts in April edged down one per cent compared with March. A new housing development is shown in Belleville, Ont., on Friday, March 1, 2024. THE CANADIAN PRESS/Chris Young](https://kitchener.citynews.ca/wp-content/blogs.dir/sites/3/2024/05/20240515080540-4901691781b909f143bbac40fbc8d9a08822eadcf8b47f5b63e8958fc5f29fd2.jpg)
Posted Jul 30, 2024 05:16:56 AM.
Last Updated Jul 30, 2024 09:58:23 AM.
A professor out of the University of Guelph (UoG), Tirtha Dhar, is suggesting a new way for young Canadians to get into home ownership: Real Estate Investment Trusts, also known as REITS could help solve the many issues facing Canada’s housing market.
Dhar was on The Mike Farwell Show July 29 to chat about REITs – creating fractional ownership with multiple investors who can get a return on the property through rent or increasing property values.
“This is sort of an out of the box idea, thinking about… we sort of get everyone involved through a process of investment, a market-based solution: that is what we are suggesting. It’s a bottom-up approach, then a top-down approach,” said Dhar.
“We always believed in this idea that if you work hard and if you have a decent job, you will be able to afford housing in the area where you work – and that dream is dying very quickly.”
A 2021 Canadian Housing Survey found that the growth of renters outpaced the growth of homeowners. It also showed that people between 30 to 34-years-old saw a greater decline.
Dhar believes REITs, which provide fractional home ownership, can also turn the heads of NIMBYs (Not In My Back Yard) or people who tend to oppose new high density developments near their home.
“Full ownership for younger generations is almost becoming impossible dream so, through fractional ownership, you can create ownership culture in society.”
The reason for NIMBY-ism tends to be because existing homeowners have fears that urban densification could increase traffic, noise, the number of pedestrians and decrease their property value.
REITs are still just an idea, but Dhar believes its one way to get Canada’s housing market back on track.