The Canada Mortgage and Housing Corporation’s (CMHC) Rental Market Report released on Thursday revealed that rent prices in Canada grew at a record pace in 2022, with the national vacancy rate for purpose-built apartments falling to 1.9 per cent – the lowest since 2001.[0] The average rent for a two-bedroom apartment increased 5.6 per cent to $1,930 while the vacancy rate for condominiums remained low at 1.6 per cent.[1]
According to CMHC’s chief economist Bob Dugan, this tightening of the rental market was a result of higher net migration, the return of postsecondary students to the campus and the spike in borrowing costs.[2] “Lower vacancy rates and rising rents were a common theme across Canada in 2022,” said Dugan.[3]
Renting was more affordable than first-time buying in 45 of the 50 largest markets in December, according to a report from Realtor.com.[4] Renters faced a 41.4 per cent ($792) lower monthly payment than a starter homeowner on average across the 50 largest U.S. metros in December.[5]
However, rental affordability remains a key issues as prices are expected to hit new highs, said Danielle Hale, Realtor.com’s chief economist. “Despite the fact that renting will likely be cheaper than buying in 2023, rental affordability will remain a key issue throughout the year,” she said.
Home affordability also improved in December, with the national median payment applied for by purchase applicants decreasing nearly 3 per cent, the Mortgage Bankers Association (MBA) said Thursday.[6]
Just five markets of the top 50 cities favored homeownership over renting in December – Memphis, Tenn. (-32.7%), Pittsburgh (-24.1%), Birmingham, Ala. (-23.5%), St. Louis, Mo. (-6.9%) and Baltimore, Md. (-3.7%).[4]
Eric Bond, a senior specialist with CMHC, declared that the high demand for limited rental units results in low vacancy rates, higher rents and a widening gap between those with long-term leases and new arrivals.[7]
Overall, rent prices in Canada are expected to continue to rise in 2023, making it increasingly difficult for those looking to rent to find affordable housing. However, whether to rent or buy will depend on personal circumstances and market conditions. The Realtor.com Rent vs.
0. “Housing affordability woes have spilled over to rental market, CMHC report finds” Financial Post, 26 Jan. 2023, https://financialpost.com/real-estate/cmhc-rental-vacancy-rate-lowest-two-decades
1. “Rents in Canada Grow at Record Pace as Housing Shortage Stings” Bloomberg, 26 Jan. 2023, https://www.bloomberg.com/news/articles/2023-01-26/rents-in-canada-grow-at-record-pace-as-housing-shortage-stings
2. “There are fewer apartments available to rent in Canada than at any time since 2001” The Globe and Mail, 26 Jan. 2023, https://www.theglobeandmail.com/business/article-canada-apartment-vacancy-rate
3. “Hamilton is running out of rentals; most units require $65K annual income: report | inTheHammer” insauga.com, 26 Jan. 2023, https://www.insauga.com/hamilton-is-running-out-of-rentals-most-units-require-65k-annual-income-report
4. “Buying a home is now more affordable than renting in these five cities” CNN, 26 Jan. 2023, https://www.cnn.com/2023/01/26/homes/rent-december-2022/index.html
5. “Realtor.com® December Rental Report: Renting Costs Nearly $800 Less Per Month than Buying” Yahoo! Voices, 26 Jan. 2023, https://www.yahoo.com/now/realtor-com-december-rental-report-110000293.html
6. “Mortgage Application Payments Fell 2.9% In December – NMP” National Mortgage Professional, 26 Jan. 2023, https://nationalmortgageprofessional.com/news/mortgage-application-payments-fell-29-december
7. “Metro Vancouver’s rental vacancy rate drops as demand, prices soar: CMHC” Business in Vancouver, 26 Jan. 2023, https://biv.com/article/2023/01/metro-vancouvers-rental-vacancy-rate-drops-demand-prices-soar-cmhc