All across Canada the cost of renting an apartment or a place to live shot up 0.9 per cent in a single month in January, according to Statistics Canada, making it the fastest one-month leap since August 1989.
And even though the hike took place in the first month that StatsCan is using a new method to estimate rental costs, the agency insists it’s not a statistical distortion.
It could also be that there have been more subtle spikes in earlier years but this one seemed beyond the pale.
And what’s going on is rental rate increases that are quite widespread, spreading well beyond the priciest markets. The latest data on asking rates for apartments from rental site Padmapper shows double-digit increases in 12 of the 24 cities covered.
Asking rates for one-bedroom apartments in Toronto jumped 10.2 per cent over the past year, to an average of $2,270, while in Vancouver rates rose 4.5 per cent, to $2,080, and Montreal rents jumped 11.1 per cent, to $1,500.
Many experts say the jump in rents over the past two years has to do with the slowdown in the owner-occupied housing market. Many would-be homebuyers have been priced out of the housing market due to the new mortgage stress test or rising interest rates, forcing people to stay in rental housing longer.
At the same time, Canada’s population growth has accelerated over the past few years, leading to the fastest population growth in several decades.
Some policy analysts say a lack of purpose-built rental housing and government-subsidized housing is contributing to the problem. Most governments in Canada long ago stopped adding to their stock of affordable housing and are now struggling to maintain their existing housing stock. Rental apartment construction has been slow for decades, even as condo construction has exploded.
The new so-called gig economy is also prompting more young people to rent for longer given the precarious nature of their work and the fact they don’t have guaranteed jobs. The kind of things banks like to see when approving mortgages. -CINEWS