Hamilton rental vacancy rate inches up, rent increases: CMHC

The Hamilton area’s rental vacancy rate has increased to 3.1 per cent but is still below the 10-year average despite an increase in supply.

Fewer tenants are making the leap to ownership because of more stringent lending rules, the Canada Mortgage and Housing Corporation says.

“That made it more expensive to buy, so as a result, fewer renters could leave the rental market to buy a home,” senior analyst Anthony Passarelli said Wednesday as CMHC released its annual rental market survey.

Ontario’s overall vacancy rate was 1.8 per cent in October while average rent was $1,197.

In the Hamilton census metropolitan area, which includes Grimsby and Burlington, this October’s vacancy rate of 3.1 per cent is up from 2.4 per cent the year before.

The average rent increased to $1,077, up from $1,020 a year ago.

When vacancy is low, landlords have more leverage to hike rents, Passarelli said. “They’re in the driver’s seat per se.”

A steady increase in rents in Hamilton has worried anti-poverty advocates and sparked protests by tenant associations.

A recent study by the Advocacy Centre for Tenants Ontario noted it takes at least $18 an hour to afford an average apartment in Hamilton.

The housing and social services sectors are placing hope in the federal Liberals’ promised $40-billion National Housing Strategy to help ease the crunch over the next 10 years.

Ontario’s minister of municipal affairs and housing, Steve Clark, said Wednesday that his PC government wants feedback on how to increase the province’s housing supply.

“We need to cut red tape,” Clark said during a news conference in Toronto. “And we want to hear the public’s thoughts on how to do that.”

In their fall economic statement, the Progressive Conservatives announced they planned to end rent control for new units in a bid to spur construction.

Landlords, however, must adhere to existing lease agreements, which are restricted to maximum yearly hikes of 1.8 per cent this year and next.

Critics of rent decontrol have argued the measure didn’t spark the construction of new apartment units in the past and it won’t now.

Passarelli said it was too early to speculate whether the Tories’ strategy would bear any fruit.

Another “key factor” in Hamilton’s low rental vacancy rate was a sustained high level of immigration here.

“Generally, when immigrants first move to Canada, they rent,” Passarelli said, noting Hamilton recently welcomed a wave of refugees from Syria.

The number of student renters in Hamilton also appears to have increased over the past year based on a spike in study permits for international students, he said.

The average number of study permits from January 2017 to August 2017 was just over 9,500 compared to 11,000 during the same eight months this year.

CMHC’s breakdown of the Hamilton CMA data shows the average rent in the downtown core was $987 in October, $962 in central, $877 in central east, $1,023 in the east end, $1,069 in the west end and $1,042 on the Mountain. In Ancaster, Dundas, Flamborough and Glanbrook, the average rent was $1,134. In Stoney Creek and Grimsby, it was $975. In Burlington, October’s average rent was $1,383.