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TORONTO — Core Development Group has just announced a $250 million investment over the next three years to tackle the growing rental supply constraints on housing in Ontario. Positioned to acquire over 180 homes this year alone, Core’s vision is to aggregate the largest portfolio of high-quality homes in Canada through its Single-Family Rental (SFR) Division of Avanew, a wholly-owned subsidiary of Core.
“Our goal is to pioneer the single-family rental concept in Canada as a viable solution to the growing housing affordability crisis,” said Faran Latafat, President of the Single-Family Rental Division of Core Development Group. “Demand for detached and semi-detached rental housing has increased significantly in the last decade. With $30 million of SFR assets already under management, we recognize the need for additional investment to help bridge this growing gap. Our $250 million investment into this market through single-family rentals represents our deep commitment to meeting the evolving needs of a growing and diverse population,” added Latafat.
There is a crucial need for more housing supply in this province. Population growth in Ontario has increased over nine per cent in the last five years, adding an additional one million people to the province, but housing completion rates have remained almost stagnant during that time.
“The GTA has been experiencing a housing supply problem for the last two decades. In 2019, developers built just under 73,000 bedrooms in 2019, less than half of the 148,000 bedrooms created in 2002,” said Ben Myers, President of Bullpen Consulting Inc.
Through its Avanew Single-Family Rental Division, Core Development Group helps address this stagnation in housing completion rates by injecting much needed supply into a corner of the market that has been largely ignored by Canadian developers.
“The only way to ease the pain of when it comes to affordability is to introduce a rental solution to the puzzle we call the GTA housing market.” said Benjamin Tal, Deputy Chief Economist at CIBC Capital Markets Inc. “We need more rental units, more purpose-built rentals in order to make sure there is an affordable channel in this environment. What we want to see is more supply coming to the market, but more purpose-built supply, not just condos,” he added.
A recent CIBC report points out that even throughout the pandemic, renters continue to be priced out of the GTA market. According to the report, 47 per cent of renters say they are unable to purchase a home due to increasingly high housing prices and over 65 per cent say low interest rates have not motivated them to consider purchasing as a viable alternative to renting.
Tighter mortgage rules, affordability constraints, increased construction costs and more transient lifestyle preferences from Canada’s growing population are all contributing factors to the steady decline of home ownership rates across the country, adding to the increase in demand for rental housing.
Representing over two thirds of Toronto’s population growth, a majority of millennials report being unlikely to buy a home and instead are looking to the rental market to meet their needs. Over 80 per cent of millennials report not wanting to rent a condo or apartment, putting upward pressure on demand for detached and semi-detached rental housing in a market with very little supply. Core’s Single-Family Rental Fund is one solution to this increasing supply shortfall.
“With over US$30 billion in market capital, SFR is not only a proven model but one of the fastest growing asset classes in the U.S. This innovative model has not reached institutional scale in Canada, but has the perfect fundamentals in the Canadian marketplace to do so,” said Corey Hawtin, Founder and CEO of Core Development Group. “Core is well-positioned to institutionalize SFR developments in Canada and achieve our vision to create a billion-dollar platform,” he added.
Single-Family Rentals is one of two rental models Core is pioneering through Avanew to address the province’s growing supply concerns, starting with the markets both in and outside of the Greater Toronto Area. Avanew’s focus is to acquire and develop both urban and suburban income generating assets to address the growing demand for more affordable residential living alternatives throughout Ontario.
For more information on Core Development Group and Avanew’s Single-Family Rental Division visit coredevelopment.ca/avanew
About Core Development Group
Core Development Group is a Toronto-based real estate development company that actively sources, develops and manages a wide range of residential real estate projects. The company takes a holistic approach to development and offers a comprehensive range of development and project management services to their clients and partners. Avanew, a wholly-owned subsidiary of Core Development Group, focuses on acquiring and developing alternative rental asset types. For more information, visit: coredevelopment.ca.
About Bullpen Research & Consulting Inc.
Bullpen Research & Consulting Inc. is a boutique real estate advisory firm founded by industry veteran Ben Myers. The firm was created to help its clients better understand the residential housing market in Canada, with a specific focus on new development in Ontario. For more information, visit bullpenconsulting.ca
View source version on businesswire.com: https://www.businesswire.com/news/home/20210428005179/en/
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