The last pockets of cheap rent in Canada are getting harder and harder to find |  CBC News

The last pockets of cheap rent in Canada are getting harder and harder to find | CBC News

As rents have soared over the past two months, affordable pockets of rental housing have become increasingly difficult to find.

In July, the average monthly cost to rent a property across Canada was $1,934 — up 10.4 per cent from last year, according to data from real estate company Rentals.ca. With a similar increase in June, the average rent rose by 9.5 percent.

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Analysts say the steep prices are due to more demand than inventory.

And that demand is fueled in part by some people fleeing the larger cities while others flock to them.

This creates a challenge for people like Joan Alexander.

Senior has rented houses across Canada, in St. Catharines, Ont., and Guelph, Ont., then in Castlegar, B.C., and for the past two years in Prince Edward Island.

Joan Alexander, left, sits with her dog Beau and her partner, Elizabeth Huether. They plan to move from PEI to Lloydminster, Alta./Sask., this October. (Contributed by Joan Alexander)

Alexander and her partner chose Summerside, a town about 50 kilometers northwest of Charlottetown, for its small-town feel.

But rising rent costs and other considerations — like proximity to health care — are driving her to move.

“We were really hoping that PEI would be our last stop on our life’s journey,” she said.

Last year, rents on PEI increased by more than a decade. In addition, there are few places to rent.

Finding affordable rental housing in post-pandemic Canada is proving to be a challenge for many, with rising interest rates, inflation and limited rental inventory.

Ben Myers, president of Bullpen Research and Consulting, a real estate consulting firm that tracks rental prices in Canada, says if you’re looking for a deal, there are still places he’d describe as relatively “cheap.”

He suggests looking at Red Deer or Lethbridge, Alberta, or Saskatoon.

“You can get a two-bedroom for under $1,150 a month. It’s about where you can work,” Myers said.

Alexander says she has managed to find several refuges on the prairies.

“It seemed too good to be true. It seemed like there were a few pockets where we could find what we were looking for. Pet-friendly, affordable, safe housing,” said Alexander, who needs tracking after he donated a kidney and a place that welcomes his beloved little dog — Beau.

Lloydminster—a city that straddles Alberta and Saskatchewan—attracted Alexandra and her husband with affordable prices and a pet-friendly property owner.

They are moving into their new home in October for $1,200 a month.

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Rising prices are leaving some tenants

While the housing market may be cooling, the rental market is on fire, with the average unit price up 10 percent compared to last year. This left many tenants struggling to find suitable housing.

Rentals.ca listings include single-family homes and semi-detached homes, townhouses, condominium apartments, rental apartments and basement apartments. The company cannot provide an average rent for all cities. Some smaller communities do not have enough rents to get an accurate average.

So it pays to hunt. There are hidden gems.

Myers says that in a typical year, rents can fluctuate by an average of three to five percent. But average rents rose 10 to 12 percent in 2019 because of a lack of supply, he says. Then the pandemic hit and rents fell by an average of 15 to 20 percent.

“We are now adjusting back to pre-pandemic levels,” Myers said.

Renters on the go

Then there are the super-expensive anomalies — like Vancouver, which rebounded even faster after the pandemic, with an average monthly rent of $2,300 in June 2022.

Myers says there has also been a significant shift to cities that previously enjoyed low rents, as some people move to smaller places where they can get more real estate for their dollar.

Baby boomers leaving the Toronto area are creating demand and driving up prices in places like the Niagara region and Halifax.

“Halifax has kind of gone nuclear. There’s certainly been a lot of Ontarians moving to Halifax during the pandemic,” Myers said.

He also says many students have stayed in their university towns, such as Victoria, London, Ont., and Kingston, Ont., when offices have closed over the past two years.

“All the advantages of living in a big city were almost a bad thing because you didn’t want to be around a lot of people during the pandemic,” Myers said.

Disappearing affordable rentals

But all these changes have only added pressure on the rental market, which according to housing policy researcher Steve Pomeroy, has seen a decline in rental options for low-income people for more than a decade.

It uses Canada Mortgage and Housing Corporation (CMHC) data to examine losses in the rental housing market.

Rents can average three to five percent, says one expert. But when the pandemic hit, they dropped an average of 15 to 20 percent. (CBC)

Pomeroy, senior research fellow at Carleton University’s Center for Urban Research, estimates that between 2011 and 2016, the number of rental units that would be affordable to households making less than $30,000 a year — with rents of less than $750 — fell by 322,600. in Canada.

This affects one in three Canadians who rent, according to 2016 Census data.

Pomeroy says that historically, Quebec has offered the largest rental inventory available in the country.

“Quebec has always been culturally very different. Renting is much more culturally accepted. It’s a little bit about the European influence… You get these very picturesque estates of two, three-story houses with wrought-iron staircases and three units and two. So by definition, two-thirds of your tenant population,” he said.

He says it may be time for the rest of Canada to consider the European model, where renting is more accepted.

He says there are many cities, for example in France and Germany, where renters almost outnumber owners.

North America has historically had a different culture where ownership is considered superior.

“Traditionally, there has been a very strong support for home ownership. Here in Canada, we’ve had mortgage insurance along with better access to credit for buyers … the political system has greatly reinforced the belief system that home ownership is the right thing to do.”

But now, tenancy and anti-poverty organizations are lobbying for more renters’ rights. That’s something Pomeroy sees as a positive shift.

He also says he believes many younger Canadians see their future in rentals. It gives them the freedom to seek experience, move for work, and not be tied down to possessions they can’t afford.

Pomeroy recently asked his graduate students — all employed and in their 20s — whether they thought they might buy a home in the next five years. Would you like?

He says he was surprised when he first heard it, none of them believed he could.

“No one thought they could, and only about half actually wanted to.”

Historically, Quebec has had the most affordable rental stock in the country, like this Montreal building seen in May that features a wrought-iron staircase and shared garden. (Ivanoh Demers/Radio-Canada)

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