A new report from Rentals.ca reveals that rent in Toronto is the highest in Canada for one- and two-bedroom apartments, while Ontario is still the most expensive province when it comes to rental housing.
Average rents in most Canadian cities for one-bedroom apartments were slightly up month over month in December with Ottawa and Calgary leading the way at 5 per cent and 4 per cent respectively.
Low vacancy rates plague most Canadian cities except Edmonton and Calgary. Even though the vacancy rates have dropped in both cities, Edmonton still had a 5.3 per cent vacancy rate in 2018 and Calgary’s settled at 3.9 per cent, according to the Canada Mortgage and Housing Corporation.
To open up some units, Toronto will consider following Vancouver’s lead in restricting the short-term rental market (AirBnBs).
“With near record-high immigration in Canada and record-low unemployment, demand for housing is high, but flat or declining resale house prices due to current and expected future credit tightening has deterred many would-be, first-time buyers from entering the ownership market,” said Matt Danison, CEO of Rentals.ca. “That demand overflow is being felt in the rental market, where very few Canadian markets are offsetting demand with new rental supply.”
“Based on recent economic data, it looks less likely that there will be multiple interest rate hikes in 2019, this should provide some comfort for first-time buyers and nudge them into homeownership,” added Ben Myers, president of Bullpen Research and Consulting. “Even if we see more ownership household formation this year, immigration is expected to stay strong. Canada’s population increased by nearly 185,000 in the third quarter. Statistics Canada said this was the largest quarterly increase in absolute numbers since the introduction of its current demographic accounting system in 1971.”
Rentals.ca and Bullpenconsulting.ca are predicting annual rental rates will increase as much as 11 per cent in Toronto, 9 per cent in Ottawa and 7 per cent in Vancouver, and 6 per cent across Canada in its 2019 predictions for the Canadian rental market. Rentals.ca based the report on its data and from interviews with 16 housing experts around the country including data analysts, professors, economists, property managers,rental advocates, landlords and politicians.
The report cited continued low vacancy rates, higher interest rates, increased immigration, insufficient affordable housing, rent control, and millennials staying in the rental market longer as the main factors in driving monthly rents higher.