The average rental rate is expected to rise six per cent across Canada this year, according to a Rentals.ca report released Friday.
In Windsor and London where rent increased last year, it won’t make apartment hunting any easier.
“Landlords currently hold a lot of power generally in the Canadian market,” Ben Murchison, head of communications for Rentals.ca, said Friday.
There is little turnover as tenants remain in their apartments, in part because it’s difficult to enter the housing market, Murchison said. The report predicts that will continue as interest rates rise.
Monthly rents are increasing because of the higher interest rates, low vacancy rates, increased immigration and insufficient affordable housing and rent control, said the Rentals.ca 2019 Rental Market Predictions report.
Murchison said there are almost no new social housing units being built, and the different levels of government aren’t doing enough to encourage developers to build apartment buildings.
“The lack of infrastructure is causing drastic low vacancy rates, and we really need intervention when it comes to that or we’re going to see a much harder road ahead when it comes to affordable housing.”
It doesn’t help that there’s no clear definition on what affordable housing means, he said.
While the report said annual rental rates are predicted to increase as much as 11 per cent in Toronto, nine per cent in Ottawa and seven per cent in Vancouver, it did not specifically look at Windsor or London.
A 2018 Canada Mortgage and Housing Corporation (CMHC) report shows rents did increase last year in both cities.
The average rent for a two-bedroom apartment in the Windsor Census Metropolitan Area, which includes LaSalle, Tecumseh, Lakeshore and Amherstburg, was $915 a month, an increase of 4.3 per cent from 2017 to 2018.
London saw a similar increase of 4.2 per cent, and its average rental rate for two-bedroom apartment was more than $1,000.
Rentals.ca looks at prices for vacancies to calculate its average while the CMHC looks at occupied apartments, Murchison explained. According to Rentals.ca the average rent for a one-bedroom apartment is $858 a month in Windsor and $1,017 a month in London.
Judy Binder, a Windsor resident who is a CMHC affordable housing specialist covering the area from Windsor to Guelph, agreed it’s tough for renters.
“Our rental market report is suggesting that, not only is it getting a little more difficult to find housing that’s more affordable, but I don’t see any change for 2019.”
Binder said the CMHC suggests people shouldn’t pay more than 30 per cent of their income on housing, which means a worker who makes $30,000 a year should only be spending $750 a month on rent. “We need to increase housing supply and address incomes that are just not able to sustain housing,” she said Friday.
Through Canada’s National Housing Strategy, the CMHC has a 10-year, $40-billion plan to give more Canadians affordable homes. Binder couldn’t give specifics but said she’s working with several organizations to increase housing opportunities in Windsor and London.
On top of predicting rising rents, the Rentals.ca report foresees rental scams will increase, that Canada’s plan to increase housing won’t be enough to offset increased immigration, and that all levels of Canadian governments will need to play catch-up to the growing affordable housing crisis or face trouble from protests to more illegal basement apartments.
On the plus side, the vacancy rate in the Windsor area increased slightly, from 2.4 per cent in October 2017 to three per cent in October 2018, according to the CMHC. In the London area, the vacancy rate went from 1.8 per cent in 2017 to 2.1 per cent in 2018.
The national vacancy rate dropped for the second year in a row, from three per cent in 2017 to 2.4 per cent in 2018.
Article originally posted on the Windsor Star website – https://windsorstar.com/