June 2018
As demand for rental housing increases, developers in some cities are trying to convert older condo buildings into apartment buildings and offering rents lower than in higher quality condo buildings.
For decades the trend has been to convert rental apartment buildings into condo buildings. This was fueled by higher home values, easy financing and people willing to purchase condos with low down payments. Now the trend appears to have reversed.
Today it is harder to obtain loans for purchasing a condo and the market is slowing. Others question the viability of repaying a large mortgage. Interest in renting has increased.
The is called deconversion. In some cities developers will purchase all units in a building, fix up the building and rent suites at higher prices than investor-landlords charge.
