As I burn the midnight oil filing my usual 150 income tax returns this spring, a number of changing trends are emerging.
When I started preparing returns for the public more than a decade ago, perhaps 10 per cent of my client families owned rental property. Now, nearly 40 per cent have at least one rental property, or rent out part of their own home.
One reason is that interest rates have been near all-time lows for an extremely prolonged period. That has made mortgages attractive for home buyers, and financial institutions have opened up to them, causing a booming uptake on Home Equity Lines of Credit, or HELOCs.
Despite the financial crisis all around us in 2008, many Western Canadians continued to hold jobs and prosper, freeing up cash. An aging population, having been out of debt for a few years, was willing to borrow against their future.
With stock markets having gone through a "lost decade" in which indices wound up where they were 10 years earlier, real estate has become a more attractive investment in many places.
But having a proliferation of rental properties being held by everyday people is cause for concern.
One of my clients bought more than a half-dozen rental resort properties near the Alberta-B.C. border, which was having a building renaissance a few years back. Then the United States housing crisis hit, and many Canadians who used to holiday regularly in the Canadian Rockies tried out U.S. vacations instead, looking to buy depressed property there. Suddenly, Canadian resort rental properties had vacant periods.
