The Association des Propriétaires du Québec is receiving more and more calls from rental housing owners who are experiencing a real impact from recurring increases in mortgage interest rates.
Those who had opted for a variable rate find themselves a few years later with rates that have doubled, or even tripled in some cases. And new buyers have decreased their purchasing power because these rates reduce their ability to pay.
As the end of the year approaches, many owners, under financial pressure, think they will be able to pass on their financial situation in the calculation of the 2023 rent increase. Just like tax or insurance increases, they wonder in which line of the calculation form to put the variation in interest rate increases.
And the answer is simple and confusing: In no place is this variation in interest rate increases part of the calculations recognized by the Administrative Housing Tribunal.
The Association des Propriétaires du Québec (APQ) believes that this variation should also be taken into account for rent increases.
The rent-setting formula used by the Administrative Housing Tribunal (TAL) is outdated and must be changed to reflect reality and mortgage rates are still a good reason.
After the negative rates of increase of the last few years, the rental housing owner who practically acts as a tax collector for the cities, and with a 50-year rate of return on investment for major work done in 2021, these rental housing owners are now facing mortgage rates not seen in years without a solution of help to alleviate their distress.