What’s Instore For The 2024 Property Rental Market?

Affordable housing has no longer become affordable as house prices are out of reach for those who want to own a home and rents have continued to escalate over the past twelve months.  Looking forward, it seems that pricing and supply issues will keep straining the rental market. Between 2014 and 2019 rents went up by an average of 20% in Canada.

This dilemma of unaffordable housing has not gone unseen by lawmakers who are now scrambling to make moves to better the situation, which has gained considerable outrage amongst citizens and political importance. Law makers cannot afford to ignore the housing issues.

Why has the rental market become so expensive?

Short-term rental market
Roughly 1.4% of Canada’s housing stock is listed on short-term rental sites such as Airbnb and VRBO. This has eaten into the long-term rental market taking off properties that would have been otherwise been used for long term rental. Homeowners find it more profitable letting their property on short-term rental than long-term.

Higher mortgage rates
With the ongoing climate of higher interest rates, fewer people are willing or even able to become homeowners. Those who don’t own have to rent. One-third of Canadian households are renters. Landlords faced with higher mortgage rates have no choice but to raise rents as a way to make the payments.

High inflation
Inflation rates have soared in the past few years and the Bank of Canada has raised interest rates to combat inflation. The higher interest rates have translated into higher mortgage rates and with these higher and unaffordable rates, it is harder for purchasers to buy, so they remain as renters. 

Higher net migration
Record immigration numbers have contributed to the post pandemic rental supply shortage which has driven up rental prices. The federal government has earmarked 500,000 potential immigrants into Canada in the next few years, citing this as a means to alleviate the chronic labour shortage currently facing the country.

There are roughly a million international students who study in Canada, contributing billions of dollars to the education system. These students need housing, and most of the universities and colleges they attend, do not have enough housing, so the students are forced to compete with the local population and other immigrants for rental housing.

Shortage of construction
Years of ignoring housing is coming home to roost. For many decades the federal government was absent on the housing front. The Canada Mortgage and Housing Corporation (CMHC) estimates that BC alone needs to build 610,000 more units by 2030. Governments at all levels are now moving rapidly to address this issue.

The Federal government has removed GST on new rental projects. The BC government recently allowed small sale multiplex housing across most cities and high rises near rapid transit. Municipal governments are revisiting zoning laws that ban new apartments on most of the residential land.

If you are looking to rent out your property or are a tenant looking to rent, we will work with you to ensure that your needs are properly addressed. Please call us on 604 913 1000 or contact us by email.  
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