In a recent article for Global News, realtors from across Canada weighed in on the state of the country’s rental market, which is heating up as the world rebounds from COVID-19. In short, realtors recommend that prospective renters should anticipate that the rental market will become more competitive in the coming months. As such, realtors are advising renters to begin their house hunts sooner rather than later—and moreover, to make moves to lock down a leasing agreement before competition becomes more fierce.
If you’re on the hunt for a rental, we want to help you get a lay of the land. Today, we discuss the hot rental market conditions across Canada, the factors behind it, and what these conditions will mean for renters.
Rental inventory is low
On a national basis, rental inventories are persistently low, with a lack of rental availability in many markets reaching a crisis point. And this is true of not only major urban centres, but also of smaller outskirt cities, where, historically, there has been far less competition for rental real estate and real estate in general.
One reason for this is the COVID-19 pandemic. Lockdown measures accelerated housing demand in places like Hamilton, Niagara, Sudbury, Sault Ste. Marie, Kitchener, and London. People who formerly lived and worked in the city began working from home, and many chose to migrate to smaller cities that offer better affordability, more space, and proximity to nature. This ongoing trend is resulting in a housing shortage in many of these cities.
But even before the pandemic, some cities were already showing signs of housing shortfalls years in the making. For instance, Niagara has been experiencing a deepening rental shortage for upwards of three years, particularly in the multifamily segment. Meanwhile, overall housing supply levels have been steadily declining in Sudbury since early 2015. And these tense conditions are expected to deepen in the coming years. According to the Federation of Rental-Housing Providers of Ontario (FRPO), Ontario will register a shortage of 200,000 rental units over the course of the next decade.
Students will be heading back to school
With the COVID-19 vaccine rollout well underway, it’s now safe to resume in-person university and college programming. And with semesters starting as soon as the fall, many out-of-town students have already begun their house hunts.
Additionally, with COVID-19-related regulations keeping post-secondary institutions from filling their on-campus residences to full capacity, more students are expected to seek off-campus rental housing. This will create greater demand for rental units in cities with prominent university programs, such as Hamilton (home to McMaster University, Redeemer University, and Mohawk College), Sudbury (Laurentian University, College Boreal, and Cambrian College), Sault Ste. Marie (Sault College), Niagara (Brock University), London (Western University, and Kitchener-Waterloo (University of Waterloo).
Canada’s borders will reopen and immigration is set to pick up
Last year, the Canadian government announced plans to bring in over 1.2 million new immigrants into the country over the next three years. And though the global pandemic has put a damper immigration rates, Canada still welcomed 26,600 new permanent residents in January 2021. Additionally, 27,000 temporary workers were invited to apply for permanent residency in February 2021, and 20,000 health workers, 40,000 international students, and 30,000 essential workers were invited to apply for residency in April.
Additionally, targeted immigration pilots are in full effect to encourage immigrants to settle in certain areas. For example, the Rural and Northern Immigration Pilot is geared at bringing newcomers to Sault Ste. Marie, Sudbury, Timmins, Thunder Bay, and North Bay. And Ontario’s Regional Immigration Pilot encourages newcomers to settle in the communities of Chatham-Kent, Cornwall, and Belleville/Quinte West.
Rents are on the rise
According to data from the Canadian Mortgage and Housing Corporation (CMHC), Ontario witnessed the largest increase in average rents of any other Canadian province between October 2019 and 2020, at 4.8 percent. Within Ontario, rents in Hamilton increased by 5 percent from 2019 to 2020, rents in St. Catharines-Niagara and Kitchener-Cambridge Waterloo increased by 6.1 percent, and rents in London increased by 6.8 percent—just to name a few. Meanwhile, in Sault Ste. Marie, rents have increased from $849 in 2019 to $1,063 in 2020.
The bottom line…
With the border re-open and the fall school semester fast approaching, there will be an influx of newcomers in need of housing. As such, rental demand is forecasted to intensify, rents will continue to rise, and competition for rental units will become more fierce. In other words, if you’re on the hunt for a new rental, now is the time to step up your property search and lock down a rental lease.
Lock down your next rental apartment in Sault Ste. Marie, Niagara, Sudbury, or Hamilton!
If you’re interested in a redefined rental experience, we offer renovated rental apartments in sought-after neighbourhoods in Sault Ste. Marie, Niagara, Sudbury, and Hamilton. From top-of-the-line finishings to energy-efficient appliances to digital amenities, our units have been upgraded to reflect the unique values of today’s tenants. Get in touch today to find out more about condo-style apartment living with CPM Properties.