Rent Prices Soar as Demand for Apartments Increases
The rental market in Canada has reached its tightest level in two decades last year, with the vacancy rate in purpose-built apartments falling below two percent and rent for new tenants increasing by 18 percent. This is according to the Canada Mortgage and Housing Corporation's annual report on the state of Canada's rental market. The figures cited above were for purpose-built rental apartments, not including condos or apartments built out of occupied family homes. For purpose-built rentals, the national vacancy rate fell to 1.9 percent last year, its lowest level since 2001.
Demand for apartments has also driven up prices, with the average rent reaching $1,258 a month, an increase of 5.6 percent from the previous year's level, and roughly twice the annual average seen for the past 30 years. However, not all units have seen rent increase at the same pace. Apartments where there was a change in tenants saw rent increase by 18.9 percent, while those where there was no change in tenancy saw rents increase by only 2.9 percent on average. This reflects the fact that landlords are generally free to increase asking rents to current market levels when a tenant vacates a unit.
The gap was even more significant in two of Canada's biggest cities, Toronto and Vancouver, where average rents for a unit that saw a tenant change went up by 29 and 24 percent, respectively. The situation is dire and landlords are taking advantage of higher market rents by evicting tenants and raising rents to someone new, this is known as renovictions.
Vancouver's vacancy rate fell to just 0.9 percent, with the average price for a two-bedroom hitting $2,002 a month, up by 5.7 percent from last year, but up by 24 percent among units that have seen a tenancy change. Some in the lower mainland's rental market fear the system is irreparably broken.
The rental market situation is dire and people are struggling to find affordable housing. The prices have spiraled out of control very quickly and this could force people to leave the province or even the country.