Demand, rates rise for Canadian apartments
The average monthly rental rate in Canada increased by four per cent in May following two months of declines, but demand for apartments is expected to remain strong, according to new data from Rentals.ca.
“It is clear that there isn’t going to be any change to the mortgage stress tests, which will continue to curb ownership demand and boost rental demand nationally,”Bullpen Research & Consulting Inc.president Ben Myers told RENX in an interview regarding the June national rent report.
The data is compiled and analyzed by the rentals website and Bullpen, a Toronto-based boutique real estate advisory firm.
“The population grew by nearly 100,000 people in Canada in the first quarter, another strong result that will boost rental demand,” said Myers. “However, there seems to be consensus among economists that interest rates will stay unchanged in the near future, which may entice more people to try to get into home ownership, which could take some pressure off the rental market.”
Toronto continues to lead the list for the average monthly rent for a one-bedroom home at $2,231. Canada’s largest city also took over the top spot from Vancouver for average monthly rent for a two-bedroom unit at $2,735.
“There is a lot more activity on Rentals.ca from private landlords listing their condo units for lease in Toronto than in Vancouver,” said Myers. “The continued strength of the ownership condo market, compared to some softness in Vancouver, is pulling all monthly housing costs up in Toronto.”
On a per-square-foot basis, rents increased by seven per cent to $2.54 over the past three months in Ontario. Rents rose by 14 per cent to $2.28 per square foot in British Columbia over the same period. Myers believes the B.C. increase is likely a statistical anomaly due to smaller units hitting the market.
Average rental rates in Ontario continue to outpace other provinces, as it costs a tenant about $600 more per month to live in a rental apartment in Ontario than in Alberta, Saskatchewan, Manitoba or Quebec. Rents are trending up in B.C., Manitoba, Ontario and Quebec, but heading downward in Alberta and Saskatchewan.
Quebec City has the lowest average monthly rent of the 34 cities surveyed in the report, with a one-bedroom unit going for $837 and a two-bedroom suite priced at $1,006.
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