London tied for 17th of 30 cities listed with Fort McMurray for average monthly rent for a one-bedroom in December at $1,195 but had much higher average monthly rent than the Alberta city ($1,250) for a two-bedroom at $1,643.
Only Kitchener finished lower than London of 12 Ontario cities for average monthly rent for a one-bedroom home in December at $1,189.
In Vancouver, higher-rent condominium apartment listings on Rentals.ca in 2019 exceeded those in 2018 which pulled up the average rents. But Vancouver rent growth was impressive given the slump in the for-sale housing market in the early part of 2019.
And what about Toronto? It’s just expensive to find a place to live there.
Young tenants in all three municipalities are looking for walkable downtown communities where they can live without the expense of owning and parking a car — and without a crippling commute. To deal with affordability, young professionals are squeezing into smaller units and living with roommates well into their 30s.
Rental affordability is expected to get worse in 2020 in Ontario and British Columbia, despite an increase in new rental apartment construction, and the crackdown on empty units and AirBnB in several markets.
Rentals.ca is forecasting more modest rental growth in 2020 versus 2019, but the expectation is average rents will grow faster than inflation in most major markets outside of Alberta and Saskatchewan.
Rentals.ca’s recently published 2020 Rental Market Predictions report, forecasts Canada’s average rental rates will increase 3 percent year over year.
With Bullpen Research & Consulting, Rentals.ca also forecasts annual rental rates could increase in 2020 by as much as 7 percent in Toronto, 5 percent in Montreal, 4 percent in Ottawa and 3 percent in Vancouver.
In the January report, Toronto had the priciest average monthly rent of the 30 cities on the list for a one-bedroom home at $2,299 and for a two-bedroom at $2,914.
St. John’s had the lowest average monthly rent of the 30 cities for a one-bedroom home at $885, and Lethbridge finished with the most affordable average monthly rent for a two-bedroom at $1,022.
The average rent for Canadian properties listed on Rentals.ca in December 2019 was $1,854 per month, a decrease of 3.3% monthly (even with an annual increase of 4.3 percent).
“As more families continue to rent as opposed to buying, we see renters for larger homes are willing to sacrifice their ability to take transit or walk to get their groceries in favour of being near a quality school,” says Vincent-Charles Hodder, CEO of Local Logic. “We expect the rental markets to perform strongly in areas close to schools in 2020.” Below is a Toronto specific chart showing renters’ interest. The sample includes about 5.5 million listing views coming from around four million users.
Other takeaways from the January National Rent Report include:
- Eight of the top 10 most expensive cities for renters searching for a one-bedroom home are in Ontario.
- On a provincial level, Ontario had the highest rental rates in the fourth quarter of 2019, with landlords seeking $2,318 per month on average for all property types. Ontario also has the highest share of condominium apartment listings at 37 percent of the provincial total. British Columbia had the second-highest rental rate at $1,928 per month, while Newfoundland and Labrador had the lowest at $954.
“Many Canadians both young and old are choosing to rent for lifestyle reasons,” says Ben Myers, president of Bullpen Research & Consulting. “Evan Siddall, president and chief executive of Canada Mortgage and Housing Corporation, recently said that the glorification of homeownership is counterproductive economically and socially.
“Developers across the country are recognizing this shift in mentality away from homeownership, as the number of rental apartment starts topped 54,000 in Canada in 2019, marking the 10th consecutive year of rising new construction activity.”
“A logjam of tenants is clogging the bottom of the market,” says Matt Danison, CEO of Rentals.ca “They are seeking the least expensive properties, often far from transit and their jobs.
I work with quite a few investors and the vacancy rate is less than 2% in London, my clients have zero vacancies with waiting lists.