Canadian Real Estate Shares Drop on Ontario Move to Freeze Rents
(Bloomberg) -- Shares of Canadian apartment companies dropped after the country’s largest province said it plans to freeze residential rents in 2021.
New rules announced Thursday apply to the vast majority of rental units in Ontario. Without the change, owners of rent-controlled apartments, condos and houses would have been able to boost rents by 1.5% next year. The legislation also extends a ban on evictions of small businesses.
Real estate investment trusts with rental properties in Ontario had been trading higher before the announcement. Ottawa-based Minto Apartment REIT fell to C$17.96 as of 2:37 p.m. Toronto time, down 3.2% from its intraday high, while InterRent REIT sagged 1.8% from its earlier high.
Canadian Apartment Properties REIT, the country’s second-largest real estate trust by market value, initially fell more than 1% on the announcement before recovering. The REITs didn’t immediately provide comment on the rule change.
“The last thing I want any family to worry about right now is whether or not they can afford to stay in their home,” Ontario Premier Doug Ford said at a news conference in Toronto.
Ford’s government also imposed new limits on social gatherings in Toronto, Ottawa and Peel, where Covid-19 cases have been rising. Outdoor gatherings are now restricted to 25 people, down from 100, and indoor gatherings are limited to 10, down from 50. The rules are primarily meant to crack down on parties and don’t apply to restaurants, movie theaters and other businesses operating with less strict capacity limits.
Ontario reported 293 new cases of Covid-19 in the past day, 21% higher than the average of the previous seven days.
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