Rental rates three times income growth in several Canadian cities

Several mid-sized Canadian cities followed the trend of raising rental rates in January.

Several mid-sized Canadian cities followed the trend of raising rental rates in January according to Huffington Post. However, larger metro areas slowed down on hikes, says recent data from Padmapper.

Data from Statistics Canada shows that wage rates were up 3.8 percent on average, this January from January of last year, which is fairly high. But in 14 of 24 cities that Padmapper covered, rent inflation overshadowed that by sometimes tripling and even coming close to quadrupling the growth of wages.

Many cities in Ontario have risen one-bedroom rates by close to 15 percent over the last year. Some of these cities include Ottawa, Kingston, the Kitchener-Waterloo area and London. A 10 percent increase in rental rates was seen in both Windsor and St. Catharines.

Halifax, Victory and Saskatoon have also seen large rent hikes.

Padmapper noted that the numbers point to “a hot market that will most likely continue to grow as we enter into the spring months.”

The largest cities in Canada have slowed rising rental rates after many years of growth. Toronto saw one-bedroom rates stay the same in January while two-bedroom rent went up by 4.6 percent.

Vancouver saw one-bedrooms rise 3.4 percent and two-bedrooms actually fell by 8.8 percent. In Montreal, rent for two-bedrooms went up 7.3 percent and one-bedroom rents stayed the same.

According to experts, rental housing demand jumped when interest rates went up in 2017-2018 as new policies were introduced to slow the growth of house prices.

Also, growing populations―partly due to the rising number of immigrants in Canada―have caused shortages in rental housing.

Some have speculated that developers have been more drawn to building condos than rental housing in the past decades. This is starting to change though, as rental rates go up. In 2019 the amount of rental housing units being built doubled from the amount five years earlier.