In the 4th annual Rental Market Predictions Report from Rentals.ca, 24 housing experts, economists and analysts share their thoughts and predictions for Canada’s rental market in 2022. The consensus? High demand and insufficient rental supply will continue to negatively impact renters as they search for a suitable place to live.
“The daily pandemic news put the housing crisis in the background for a while,” said Matt Danison, CEO of Rentals.ca Network, “But now as COVID-19 recedes, we are talking again about our lack of supply. This problem will keep rents on the rise in most of Canada for the rest of the year.”
The forecast calls for Toronto average monthly rents to bounce back 11 per cent by the end of the year; Mississauga monthly rents will be up 7 per cent by December; Vancouver average rents will increase 6 per cent; Montreal will post an annual increase of 5 per cent and Calgary rents will go up 4 per cent annually, according to Ben Myers, president of Bullpen Research & Consulting.
For the Toronto rental market specifically, Tony Irwin, president and CEO of the Federation of Rental-housing Providers of Ontario (FRPO) says he believes building infill development on existing sites, reducing taxes and fees on rental projects, and zoning amendments in areas such as transit corridors, could be the keys to boosting supply.
“We need to get all types of rentals built,” he said. “We’re starting to see more projects in the pipeline, but we need action from all levels of government to help solve the problem.”
Referring to the broader rental market, Max Steinman, CEO of Rentsync, predicts that vacancy rates will continue to drop as supply cannot keep pace with demand. Additionally, he says rents will continue to increase in most markets because of supply issues, and millennials will continue to migrate to secondary markets as employers remain flexible to working from home. Steinman projects that tighter supply will become a bigger issue in secondary markets, accelerating rental rates even greater than in many primary markets. In terms of solutions, he says he would like to see more office space converted to residential projects, and criticizes the bureaucratic processes that have hampered these conversions in most municipalities.
Jennifer Hunt, an international real estate investment expert, and chief intelligence officer at the Real Estate Wealth Lab, predicts that “rents will rise in nearly all markets in North America over the next 10 years,” adding that Canada needs unprecedented construction levels to address the supply problem which has been slowed by supply chain disruptions, government-imposed COVID restrictions, lumber costs and inflation.
More topics explored in the report:
- Is Canada’s Budget 2022 $10 billion plan to redouble housing construction realistic given supply chain issues, lack of skilled workers, and inflation among other constraints?
- The types of amenities renters are looking for have change post-Covid, with features like pet-friendly units, in-suite laundry, access to outdoor space, larger unit sizes, and refrigerated delivery rooms becoming highly sought-after features.
- As downtown offices, restaurants, bars, and venues reopen, renters are drifting back to city centres where rents are increasing. But some renters who made the move to smaller markets are staying, causing rents to rise there, as well.
- The pandemic accelerated the work-from-home phenomenon, and it’s here to stay, even if just partially for some businesses. Companies will be shedding some office space as a result. How long will it take cities to rezone to convert some of this space into lofts for work, live, shop and play areas?
- Will Baby Boomers begin moving and downsizing again or remain aging in place?
- In Medicine Hat, the municipality has functionally ended chronic homelessness. What can be learned and applied from this success?
- As supply becomes more of an issue, lot-splitting, infill development, “as of right” zoning, inclusionary zoning, laneway suites, and co-op housing will be terms we’ll be hearing a lot more of.
For the full report, click here.
