Rent report findings bleak

Government action urged to help rates

Rents are rising amid high demand, interest rates and inflation, and will continue to get worse over the next decade unless governments work together.

That’s according to the fourth annual report from Rentals.ca Network — a group of internet listing services including Rentals.ca and TorontoRentals.com, among others — which paints a sobering picture of the uphill battles ahead in creating affordable rentals.

The market predictions from experts across Canada take into account the impacts of the pandemic on housing as well as further interest rate hikes expected in the coming months.

Here are five key projections from the report:

Rents will continue to rise

Though the pandemic started with high rents, there was a dip mid-2021 as COVID-19 worsened and people worked and studied from home, creating less demand for available units. But rents rose again later that year, and they haven’t stopped, the report says.

The increase is driven mostly by low supply and high demand in Canadian urban centres. The exception is the Prairies.

But for most Canadian cities, rent isn’t expected to lower this year, the report predicts, though Toronto, Mississauga, Montreal and Calgary are expected to end the year below their peak levels from the end of 2019 and early 2020, says one expert.

But that may change depending on government regulations, immigration and COVID-19.

Millennials will increase rents in the suburbs

With flexible work options, millennials will keep moving out of major markets into places where they can afford more space, experts predict.

“The work-from-home phenomenon is here to stay, even if partially,” said Paul Danison, content director for Rentals.ca, who helped author the report.

Migration out of the city is in turn projected to drive up rents even more in the secondary markets because of lower supply.

Fewer rentals with a side of free Wi-Fi (or helicopter rides)

When the pandemic hit and employers encouraged work from home, some landlords started to get creative to encourage people to rent their homes.

“Incentives were really big during the pandemic when people weren’t moving very much and there were more vacant units,” said Danison. That could include a month or two of free rent, or free Wi-Fi, streaming services, parking, gym memberships or digital subscriptions.

But the perks aren’t as common or ambitious now.

Work-from-home could turn into live-at-work

To help meet rental demand while addressing an oversupply of office space since COVID-19, more officeto-residence conversions are expected, the report notes. But experts say municipalities should streamline the process for these conversions to help boost traffic to downtown cores.

“Typically, you can take cars off the street because you try to do this around transit places,” said Danison.

Government co-operation key to addressing housing crisis

Municipalities are currently acting in a vacuum when enforcing zoning regulations, which the report says leads to uncertainty, with complex approval processes affected by political interference. That’s why experts are calling for zoning and land use decisions to be handled regionally or provincially.

“You can’t have provinces coming up with a set of rules and then get down to the municipal level and the municipal government just says ‘No, we’re not going to do that,’” Danison said.