Rent hit a new high in July as students prepped for school, buyers sidelined: report

TORONTO –

Canadian renters have lengthy lamented the rising costs they see landlords request of tenants, however in July, these totals hit a degree unseen within the nation’s historical past.

Data from Rentals.ca and analysis agency Urbanation launched this week reveals July’s common asking hire hit $2,078, simply shy of 9 per cent above the identical month final 12 months.

The organizations behind the information mentioned July’s numbers additionally represent the quickest tempo of development over the previous three months and add the common asking hire rose 1.8 per cent between June and July, probably the most speedy month-over-month improve within the final eight months.

Compared to July 2021, the common asking hire elevated by 21 per cent, including $354 monthly on common.

“I wouldn’t be at all surprised if the average asking rents next year in Ontario jumped to $3,500,” mentioned Douglas Kwan, the director of advocacy and authorized companies on the Advocacy Centre for Tenants Ontario, which defends tenant rights.

“There really doesn’t seem to be any sign that this crisis is going to be abated or lessened.”

Kwan routinely sees tenants shocked by the hire will increase their landlords are proposing or the figures they see on advertisements. In one occasion, a household of Syrian refugees started renting a house in Waterloo, Ont., for $2,000 a month. Their landlord approached them a 12 months later in search of virtually $4,000 a month as an alternative.

“We’re also hearing stories of people coming from all across Canada, some who sold their property to move to eastern Ontario (in a new building advertised as affordable), hoping to find a place to retire that was affordable,” Kwan mentioned.

“Well, they moved in there and they found out that their building was rent control exempt but found their rents would go up 20 per cent the following year.”

While there are lots of elements, together with a scarcity of inexpensive housing, pushing up asking rents, Rentals.ca and Urbanation attributed the July riseto a surge in post-secondary college students signing leases earlier than the autumn, unprecedented ranges of inhabitants development and homebuyers holding off on purchases as rates of interest have risen.

“Canada’s rental market is currently facing a perfect storm of factors driving rents to new highs,” mentioned Shaun Hildebrand, president of Urbanation, in a news launch.

“These include the peak season for lease activity, an open border policy for new residents, quickly rising incomes, and the worst ever home ownership affordability conditions.”

Realtors have reported some potential patrons have stayed out of the housing marketplace for the majority of the 12 months after being spooked by a succession of rate of interest hikes that ate into their shopping for energy.

The common worth of a house reached $709,218 in June, up 6.7 per cent from a 12 months earlier, the Canadian Real Estate Association mentioned final month. On a seasonally-adjusted foundation, it was $709,103, down 0.7 per cent from a 12 months prior.

The group believes the nationwide common residence worth will edge down 0.2 per cent from 2022 to $702,409 this 12 months earlier than rising to $723,243 in 2024.

Such costs are retaining aspiring patrons within the rental market, however they are not seeing a lot aid there both.

For the primary time ever, common asking rents for purpose-built condominiums and flats rose above $2,000 in July, reaching $2,008, Rentals.ca and Urbanation’s analysis confirmed.

One-bedroom flats alone noticed a 13 per cent annual improve and a month-to-month rise of two.5 per cent, bringing July’s determine to $1,850.

The common asking hire for a two-bedroom unit sat at $2,191, adopted by $2,413 for three-bedroom models. However, studios averaged $1,445.

Much of the expansion in annual asking rents for purpose-built and condominium flats got here from Calgary, which retained its standing because the area with the quickest hire development amongst Canada’s largest markets.

Montreal additionally noticed vital acceleration in asking rents, however most different markets grew at a slower price than has been the norm these days.

The Rentals.ca and Urbanation report additionally detected an increase in asking rents for these in search of roommates. In B.C., Alberta, Ontario and Quebec, asking hire for such lodging rose by a median 16 per cent over the previous 12 months to $971.

Vancouver and Toronto landed the highest spots for common asking rents for roommate leases, with rents at $1,455 and $1,296 respectively.

Such numbers have been no shock to Kwan.

“We’ve seen ads, where not just rooms in a house are being rented out, but even half of a mattress, half of a bed is being rented out, or you have one room where there’s two or three mattresses in there being rented out to tenants.”

“It just really underscores the fact that people can’t afford to live in our communities.”

This report by The Canadian Press was first printed Aug. 11, 2023.