Rental Rates Soar By Double Digits In Half Of Canada's Largest Cities
The cost of renting an apartment is climbing rapidly in many of Canada's largest cities, led by Toronto and nearby places, new data shows.
Vancouver reclaimed its spot in April as the priciest city in Canada in which to rent an apartment, rental site Padmapper said, with the average price of a one-bedroom apartment hitting $2,100, slightly ahead of Toronto's $2,080.
Padmapper indexes data from "hundreds of thousands of active listings across the country." It excludes short-term and Airbnb listings.
Rents for one-bedroom apartments in Vancouver were up a solid 8.2 per cent over the past year (though two-bedroom apartments have actually fallen slightly in price, to $3,200).
But that's nowhere near the spike in rental rates seen in Toronto and surrounding areas. One-bedroom rents are up 15.6 per cent in a year in the city, the strongest price growth among 26 municipalities measured.
Thanks primarily to spikes in rental rates in southern Ontario communities like London and St. Catharines, half of the cities surveyed by Padmapper have recorded double-digit rental rate increases over the past year.
Rental market observers say those southern Ontario cities are experiencing "spillover" from the hot Toronto real estate market.
Rapidly rising house prices in recent years have forced many would-be home buyers to stay put in rental housing for longer than they otherwise would have. That increased demand for rental housing is putting upward pressure on prices, experts say.
At the same time, Toronto's rising house prices have convinced some buyers to move further away, to nearby cities like Hamilton and Kitchener-Waterloo, which have seen house prices jump in recent years. That increase in demand has put pressure on rental rates in those cities.
Rising rental rates are becoming a political issue, as some municipal leaders call for more action to be taken on the "housing crisis."
A recently released Canadian Rental Housing Index, which uses data from the 2016 census, found that four in 10 renter households spend more than 30 per cent of their income on rent and utilities, the cutoff line for affordability according to Canada Mortgage and Housing Corp.
More alarmingly, the index found that nearly a fifth — 18 per cent — of Canadian renters spend half or more of their paycheques on rent. The index's authors called that a "crisis level" of spending that puts people "at risk of homelessness."
The index found that rental affordability problems are more widespread than the affordability problems in the owner-occupied market.
While affordability has reached historically poor proportions specifically for homebuyers in Toronto and Vancouver, renters are facing affordability problems right across the country, the index found.
The share of renters who spend half their income on housing is only slightly higher in Toronto and Vancouver than it is in Canada as a whole, the data showed.
Source: HuffPost Canada
Thinking of buying or selling a property, or have a question regarding the real estate market? Fill out the form below and I'll get back to you promptly.