Finding An Apartment To Rent Could Soon Suck Even More For Canadians – Here's Why
Converted commercial buildings and repurposed condos may be a band-aid solution, experts warn.
The rising cost of rent may soon be less of a worry than securing your next stay when it comes to housing woes in Canada. Although the country's supply of purpose-built rental units is growing at its fastest pace in seven years, pressure on the rental market remains through the roof, especially with immigration targets set at record levels.
A recent RBC report warns that Canada's rental housing gap — the difference between the projected rate of rental availability and the number of homes required to achieve balance — could quadruple the current deficit, falling 120,000 short by 2026.
Canada's homeownership rates have already hit a 30-year low due to affordability challenges, and with an 8% increase in annual federal immigration targets expected by 2025, experts say it's unlikely that demand for rented accommodation will diminish any time soon.
While cities like Calgary and Ottawa-Gatineau have seen significant growth in purpose-built rentals, Toronto and Montreal have seen the smallest percentage increases, even though they're among the most popular destinations for newcomers.
The situation has resulted in an uneven distribution of supply and demand, driving record rent increases, especially in Gatineau, Toronto, and Calgary, where rent growth for a two-bedroom purpose-built unit rose by 9%, 7%, and 6%, respectively.
Meanwhile, rental condo vacancy rates in Ottawa-Gatineau, Toronto, and Calgary are among the lowest in the country, suggesting intense competition that adds pressure to rates.
To meet current and future demand and provide stability and greater affordability in the rental market, Canada will need to considerably increase the supply of purpose-built rentals, write RBC economists. That will require adding approximately 332,000 units to the current rental stock over the next few years.
The experts caution that relying solely on converting commercial buildings, repurposing condos and adding rental suites to existing homes may be a band-aid solution and not enough to address the worsening housing situation.
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