Average rent in Canada’s largest cities reaches record high

Average rent in Canada’s largest cities reaches record high

By Ysh Cabana

Inching closer to the $2,000 threshold, the average rent for a one-bedroom apartment in Toronto remains one of the highest in Canada.

According to apartment search portal PadMapper, the median price Torontonians are paying for a one-bedroom unit this month is $1,940, which was a 0.5 per cent month-over-month increase.

That’s up from the October 2016 average of $1,370, which is a 15.5 per cent increase over a year.

For two-bedroom units, the median price dropped in the month by a small 0.4% to $2,430. But remains high with a 15.7 per cent year-to-year jump.

Padmapper, which compiles rental data statistics from Canada’s 25 biggest metropolitan areas in terms of population size, only began publishing in June 2016, so data comparison for each year isn’t possible. But Toronto’s housing market has been seeing price hikes well above any other markets in Canada, including the most expensive Vancouver.

Vancouverites were once again found paying the highest rents at $2,120 and $3,200 for one- and two-bedroom units, respectively. With an increase of 15.8 per cent, it is the steepest price increase in any city covered in the PadMapper survey. Meanwhile Montrealers, saw rental rates jump 15 per cent, with one-bedroom units at $1,230 average.

The city with the lowest rent in Canada in October was Windsor, Ontario, where one-bedroom apartments went for $640, and two-bedroom units cost $890 per month.

Elsewhere across the country, rents are rising as skyrocketing house prices force some would-be buyers to keep renting. Halifax, London and Sherbrooke, saw double-digit price hikes as well.

“Unhealthy rental market”

Experts are pointing to a significant lack of supply of rental housing in Canada’s major cities.
Looking at the 2016 data from Canada Mortgage and Housing Corporation, Toronto’s apartment vacancy rate was just 1.3 per cent, while Vancouver’s was a miniscule 0.7 per cent. Housing advocates argue that anything under 3 percent is “unhealthy.”

“We are in very unhealthy territory in the rental market,” said Cherise Burda, executive director of the Ryerson City Building Institute. “A lot of rental housing could be made available.”

The Ryerson CBI and Evergreen published a report recently detailing the rental market in the Toronto Area, the need for new purpose built rental units and how to make it happen.

“A key reason for the declining health of our rental market is an over-reliance on private condominiums,” wrote the authors of “Getting to 8,000.”

They noted that in the past ten years, Toronto’s rental market has only grown by 2,400 purpose-built rental units, and 76,000 private rental condo units. They also indicated that the city would need to build at least 8,000 new rental units per year if it wants to reclaim a healthy vacancy rate.

With approximately 90,000 people moving to Toronto each year and the average price for a one bedroom currently hovering around $2,000, that’s quite difficult to achieve. But if actions are done immediately, the report notes, it may take five to 10 years to relieve the crisis.

“All levels of government have a role to play in developing short- and long-term policies that can create a more stable and secure rental market,” said Graham Haines, CBI Research Manager, and one of the report’s authors.

Last month, Ontario has expanded its rent control policies in the Fair Housing Plan to limit the rent hikes to the rate of inflation. The province has also unlocked land sites, such as West Don Lands, to build more units at the low end of market rents. While these measures have been put in place to level the playing field, developers have been trying to bypass the laws.

Real estate consultancy Urbanation says there over 25,000 units in “active” development— projects that are either being considered by developers or have already been proposed to municipalities.

For now, as the situation is dire, renters find it harder and harder to afford apartment. Will this trend continue to push Toronto to become the priciest Canadian city to live in?