Average Rent Increases Around Quebec Were Bad In 2022 — Here's Why They'll Probably Get Worse
Rents already went up in 2022...
Apartment dwellers will feel the squeeze this year in Quebec. According to a market forecast by Desjardins, the average Quebec rent could surge by as much as 10% in 2023 as new unit construction stagnates even amid an increase in demand.
Desjardins forecasts the provincewide vacancy rate, the number of empty apartments as a share of the total number of units, could therefore plummet to just 1%, compared to 1.7% in 2022.
Eight regions, Chaudière-Appalaches, Estrie, Mauricie, the Centre-du-Québec, Outaouais, Saguenay–Lac-Saint-Jean, the Bas-Saint-Laurent, and Gaspésie–Îles-de-la-Madeleine already had vacancy rates lower than 1% in 2022.
Montreal's 2022 vacancy rate was 2.3%.
Economists Hélène Bégin and Maëlle Boulais-Préseault point to the decline in available units, a post-pandemic immigration rebound, and the inaccessibility of homeownership due to high interest rates as reasons for the uptick in demand for apartments.
Those high borrowing rates are also preventing developers from building new units, they say, predicting a 20% drop in new apartment construction in 2023.
They suggest only government intervention can help the situation.
"Unless there is a massive injection of public funds, regulatory flexibility or increased support for municipalities, rental apartment construction will continue to slow rather than accelerate," the economists write.
All 17 regions of Quebec already saw average rent increases in 2022. The increase was 8.4% in Montreal, just under the provincial average of 8.9%, according to Desjardins. Seven regions, Abitibi-Témiscamingue (9.4%), the Centre-du-Québec (10.4%), Montérégie (13.1%), Estrie (13.2%), the Laurentides (13.7%), Lanaudière (14.3%), and Outaouais (22.1%), saw their average rent jump by a rate higher than the provincial average.
Desjardins does offer some hope. Bégin and Boulais-Préseault say a decrease in interest rates and an expected decline in home prices this year, could lead to more construction in 2024.