Rent prices rose at a record pace in 2022 as Canada

Rent prices in Canada rose at a record pace last year as the country recorded the lowest vacancy rate since 2001, the Canada Mortgage and Housing Corporation (CMHC) said.

In a report on Thursday, the federal housing agency said the average rent for a purpose-built two-bedroom apartment, which it uses as a representative sample, rose 5.6% from the period. of previous 12 months.

CMHC said the increase is a new annual high in data dating back to 1990.

The report also says last year’s booming real estate market saw the lowest vacancy rate for purpose-built rentals in decades, leaving even fewer options for those looking for rental property. .

The vacancy rate for these properties was 1.9% last year, compared to 3.8% a year earlier.

CMHC says the fall reflects a general tightening in the rental market, with immigration rising following a pandemic downturn and rising mortgage rates making it harder for renters to buy properties, the price of which has risen. soared at the start of 2022.

Although it has been declining in recent months, the Canadian Real Estate Association said the national average home price was still $626,318 in December, down 12% from the same month last month. last year.

Such prices and a stubbornly high rate of inflation have left many people stuck in the rental market, which favored renters for much of the pandemic but suddenly swung to the side of landlords.

The shift in power has made finding and paying for a rental more difficult and expensive.

“Falling vacancy rates and rising rents were a common theme across Canada in 2022,” Bob Dugan, CMHC’s chief economist, said in a statement.

“This has caused affordability issues for tenants, especially those on lower incomes, with very few units on the market available in their price range.”

The squeeze was sharp in Vancouver, where the vacancy rate fell from 1.2% in 2021 to 0.9% last year, and in Toronto, which fell from 4.4% to 1.7% .

The rental market in Montreal reached 2.3% against 3.7% a year earlier and that of Calgary fell from 5.1% to 2.7%, the lowest level observed since 2014.

In Edmonton, it fell from 7.3% to 4.3% and in Ottawa, it fell from 3.4% to 2.1%.

Halifax’s vacancy rate did not change in 2022, remaining at a record low of 1%.

Falling vacancy rates have pushed up rental prices.

CMHC found that the average rent for a two-bedroom purpose-built rental jumped 5.6% to $1,258 and that the average rent for a two-bedroom rental condo jumped 9% to reach $1,930.

CMHC said the higher rent growth was widespread geographically, with the steepest increases seen in Vancouver and Toronto. The average rent for a two-bedroom purpose-built unit in Vancouver was $2,002 and $1,779 in Toronto.

Rentals.ca also found that the average posted rent for all property types rose 12.2% year-over-year to $2,005, an increase of $217 from the average for December 2021 of $1,788.

However, on a month-to-month basis, average rents fell by around 1%, which the site called a “typical seasonal occurrence.”

The small decrease is far from the relief that low-income renters need.

The share of rental housing that was affordable – when the person or persons renting a unit collectively spends no more than 30% of their gross income on rent – ​​for the lowest income tenants was, in most markets, in the bottom 10% or too low to report, CMHC said.

The share of affordable rental housing for low-income renters was so low in areas like Toronto, Ottawa, Windsor, Hamilton, Sudbury, Kingston and Belleville that CMHC couldn’t even release numbers.

In other regions such as Calgary, Winnipeg, Halifax and Vancouver, the share was 5% or less.

Markets in Quebec were an exception to this trend with 25% affordable rental housing for low-income earners, followed distantly by Prairie communities like Regina and Saskatoon, where the numbers were 8% and 7%, respectively.

This report from The Canadian Press was first published on January 26, 2023.