Posthaste: Renters rejoice, relief may be on the way
Renters rejoice, relief may be on the way.
Skyrocketing rents over the past few years has piled pressure on Canadian households already struggling with high inflation.
October brought the first relief in three years when the asking rent for apartments across Canada fell, with the most expensive markets in Toronto and Vancouver showing the biggest declines.
The asking rents in Canada averaged $2,152 that month, down 1.2 per cent from the year before — the first decline since July 2021 during the COVID-19 pandemic, according to a report by Rentals.ca and Urbanation.
In Toronto, the asking rent for a two-bedroom apartment dropped $320 or 9.4 per cent from a year ago while Vancouver posted an even bigger decline, dropping $478 or 12 per cent, said Rachel Battaglia, an economist with Royal Bank of Canada.
But is this relief temporary or the start of a new trend?
In the RBC report, Battaglia looks at this question and finds several forces are working to lower rents.
First, there is more supply.
Completion of rental units from construction projects started in years past have increased significantly in recent quarters, she said. Over the past decade, the number of purpose-built units started almost quadrupled after the introduction of government incentives.
In Toronto and Vancouver rental construction outpaced population growth, she said.
Second, there is less demand.
Lower immigration targets set by the federal government this year have already curbed population growth among foreign students and temporary workers, who often rent their housing, said Battaglia.
The full impact of the government’s new targets is yet to be seen, but it is expected to shrink the country’s population growth by 400,000 households over the next three
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