News of record-breaking real estate prices and government-imposed foreign home buyers’ taxes are just some of the headlines dominating the Canadian real estate market. As summer heats up, many Canadians are wondering if the rental market will follow suit.
Whether you are looking to rent a new condo or debating on extending your current agreement, it’s important to know what’s happening in the rental market. As we’re all aware, when real estate prices go up, rental prices are sure to follow.
Rental Market Trends Across the Country
There is one trend that should be addressed first and foremost. The rental market in Canada is accelerating this year and prices are steadily increasing across the country. Just look at the headline of this Vice article on Canada’s “out of control rental market” that was published a few months ago.
From Vancouver to St. John’s, demand for rental units is increasing, spearheaded by a record number of immigrants in 2018 and a steadfast Canadian economy. Steep rate increases and “renovictions” are the outcome of a rental market that cannot keep pace with demand, for the most part. Vacancy rates are at multi-year lows, and efforts to build more affordable rental units have fallen in the shadows of cranes and new condos.
Most & Least Expensive Markets
Wondering who topped the list of the most and least expensive cities to rent in Canada? RentSeeker recently published information showing the average rent costs for the biggest cities across the country.
Toronto and Vancouver have long been the leaders of the pack, but now Ottawa and Montreal are taking over, reaching all-time highs and leading the country in terms of growth. Vancouver and Toronto are still the most expensive rental markets, though both have shown signs of improved affordability.
New Kids on the Block
It may surprise some Canadians to see so many cities outside the GTA enter the top 10 most expensive list, with fewer cities from Western Canada than previous years. Kingston, Barrie and Oshawa are all well outside of the GTA, showing how far the expansion has reached in a saturated and competitive market.
Cities outside the GTA (like Barrie and Oshawa) are experiencing increases in rental rates on a monthly basis, and despite increased calls for government intervention, the soft landing has ended and the rental market is once again, ready for takeoff.
Good News on the Horizon
The Toronto rental market seems unstoppable for the foreseeable future and winning an NBA championship has only increased demand for rental units in (and anywhere near) the downtown core. Finding an apartment to rent in Toronto can be competitive, but there are lots of opportunities to live in
Nevertheless, for the first time in several years there are signs of increased affordability as freshly finished towers hit the market with new vacancies, and prices are balancing out. Keep in mind a modest drop in average rent price at this point would still be considered high in a city where a one-bedroom condo in the downtown core will cost you over $2,000 a month.
In Vancouver, prices have started to change as well. For the first time in years, prices have dropped, technically speaking. Rent is still incredibly high as home prices in the city exploded 200% faster than New York City since 2000, a figure that helps put the current “dip” into perspective.
Value in Quebec
Montreal has always been considered a bargain compared to other cities and this notion has spread as the popularity of the city increases, especially with investors looking to avoid a foreign home buyers’ tax. Quebec is well represented on the list of the most affordable places to rent, and there are lots of deals to be had.
Affordability measures continue to be the lowest in British Columbia and Ontario where some renters spend nearly 80% of their income on rent according to the Canadian Rental Housing Index. Quebec and Eastern Canada present more affordable options, but one trend is constant across the country, demand and rental prices are going to increase alongside the population and competition in popular markets.
