The latest report from Rentals.ca and Bullpen Research & Consulting reveals that although rental rates have declined across Canada for the second month in a row, overall they are up 8 per cent from the end of 2018.
Despite August being one of the busiest months for moving in Canada, that didn’t result in an increase in rental rates month over month, as the average rent for all property types on Rentals.ca declined by 0.7 per cent to $1,914 per month.
This follows a decline of 1.3 per cent in July. The median asking rent in August of $1,800 per month is also down from July ($1,825).
Many landlords have been upgrading and repositioning their multi-residential buildings to capture some of renters’ willingness to pay for better amenities.
Citing preliminary results of the fourth annual Canadian Multi-Res Tenant Rental Survey by Avison Young and Informa, the report indicates that just over one third of the responding 18,000 tenants said they would be willing to pay more rent for a renovated kitchen and bathroom. Fewer than half indicated they are happy with their rental unit as is.
With more apartment renovations and rising rental apartment completions in the pipeline, the report predicts we could see double-digit annual rent increases in Canada for 2019, and considerable movement over the final months of the year.
Survey data also shows that tenants in Toronto are spending 42 per cent of their income on rent, while tenants in Vancouver are spending 34 per cent.
“Part of the explanation for this gap are the smaller apartment sizes in Vancouver versus Toronto, but a potential factor could be an increase in the number of households with roommates,” said Ben Myers, president of Bullpen Research & Consulting.
At the bottom of the list, cities with the most affordable average monthly rents are: Gatineau, Quebec City, Lethbridge, Saskatoon and Red Deer.
Ten of the top 11 cities on the list for highest monthly average rent for a one-bedroom home are in Ontario, with Vancouver sitting at number 3 (after Etobicoke).
With many Ontario cities in the high rent category, the province remains the most expensive market for rental apartment over the past three months with an average rent of $2.57 per square foot. Rent has increased significantly in British Columbia from late last year to $2.49 per square foot, up from $2.01 per square foot in Q4-2018.
Other takeaways from the September National Rent Report include:
- Part of the decline in the national rental rate in August can be attributed to a decline in the percentage of higher-priced condominium apartments and single-family home listings in August, and an increase in the less expensive rental apartments. The chart below shows the monthly breakdown of Rentals.ca listings since October 2018.
- The Tenant Preferences Survey shows that Toronto renters under 30 are spending 49% of their income on rent. The CMHC recommends no more than a 30% rent-to-income ratio. Also, from the data on Rentals.ca, there is a clear preference among prospective tenants for downtown Toronto.
- In Halifax, rental rates have been rising quickly in 2019 with the average rent increasing by over $300 per month from early 2019 for all property types.
- The median rental apartment unit listed on Rentals.ca in Halifax has grown significantly over the last six months from under 1,000 square feet to 1,400 square feet. With almost 4,000 new rental apartments completed from 2016 to 2018 in Halifax, and another 877 in 2019, there are a lot of new units leasing, plus the popularity of Rentals.ca in the province is attracting new landlords with older and larger product.
“Despite affordability concerns, tenants continue to seek out larger apartments,” said Rentals.ca CEO Matt Danison. “The Rentals.ca data shows higher rental growth for two- and three-bedroom condo and rental apartments in Canada in 2019 versus studio and one-bedroom suites.”