The Last Pockets of Cheap Rentals in Canada Are Getting Harder to Find | CBC News

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As rental prices have risen over the past two months, it has become increasingly difficult to find affordable pockets of rental housing.

In July, the average monthly cost of rental properties across Canada was $1,934, up 10.4 percent from last year, according to data from property listing company Rentals.ca. A similar increase in June saw the median rent rise 9.5 percent.

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Analysts say the high prices are being driven by more demand than inventory.

And that demand is being driven in part by some people fleeing larger cities while others flock to them.

This creates a challenge for people like Joan Alexander.

The senior has rented homes across Canada, in St. Catharines, Ontario, and Guelph, Ontario, then Castlegar, BC, and for the last two years on Prince Edward Island.

Joan Alexander, left, sits with her dog, Beau, and her partner, Elizabeth Huether. They plan to move from PEI to Lloydminster, Alta./Sask., this October. (Submitted by Joan Alexander)

Alexander and his partner chose Summerside, a town about 30 miles northwest of Charlottetown, for its small-town feel.

But rising rental costs and other considerations, like proximity to health care, are prompting her to move.

“We really hoped that PEI would be our last stop on the trip of a lifetime,” he said.

Last year, rents in PEI increased more than in a decade. In addition, rental places are scarce.

Finding affordable rental housing in Canada after a pandemic is proving challenging for many, with rising interest rates, inflation, and limited rental stock.

Ben Myers, president of Bullpen Research and Consulting, a property advisory firm that tracks rental prices in Canada, says that if you’re looking for a deal, there are still a few places you’d describe as comparatively “cheap.”

This two-bedroom apartment in Lloydminster, Sask., offers a 1,000-square-foot corner unit in a quiet building for $1,250 a month. (Aspen/Kijiji)

He suggests looking at Red Deer or Lethbridge in Alberta, or Saskatoon.

“You can get a two-bedroom apartment for less than $1,150 a month. It’s about where you can work,” Myers said.

Alexander says that he was able to find some shelters in the prairies.

“It felt almost too good to be true. There seemed to be some pockets where we could find what we were looking for. Safe, affordable, pet-friendly housing,” said Alexander, who needs to be monitored after donating a kidney and a place that gives him the Welcome to your beloved little dog, Beau.

Lloydminster, a city that straddles Alberta and Saskatchewan, attracted Alexander and his spouse with affordable prices and a pet-friendly owner.

They move into their new $1,200-a-month home in October.

SEE | Exhausted by rising rents:

Sky-high prices leaving some renters out of price

While the housing market may be cooling off, the rental market is on fire, with the price of a median unit up 10 percent from last year. That has left many renters struggling to find suitable housing.

Rentals.ca listings include single-family and townhouses, townhouses, condominium apartments, rental apartments, and basement apartments. The company cannot provide an average rent for all cities. Some smaller communities do not have enough rents to get an accurate average.

So it’s worth the hunt. There are some hidden gems.

Myers says that in a typical year, the rent can fluctuate by an average of three to five percent. But median rents grew 10 to 12 percent in 2019, due to tight supply, she says. Then the pandemic hit and rents dropped, on average, by 15 to 20 percent.

“We are now adjusting to pre-pandemic levels,” Myers said.

Moving tenants

Then there are the super-expensive anomalies, like Vancouver, which has recovered even faster from the pandemic, with a median monthly rent of $2,300 in June 2022.

Myers says there have also been significant shifts toward cities that used to enjoy low rents, as some people migrate to smaller places where they can get more real estate for their dollar.

Baby Boomers retiring from the Toronto area are creating demand and driving up prices in places like the Niagara Region and Halifax, for example.

“Halifax has gone nuclear. Definitely a lot of Ontarians moved to Halifax during the pandemic,” Myers said.

In addition, he says that many students stayed in their university cities such as Victoria, London, Ontario and Kingston, Ontario, when the offices closed during the last two years.

“All the benefits of living in a big city were almost bad because you didn’t want to be around a lot of people during a pandemic,” Myers said.

Affordable rents disappearing

But all of this change has only put more pressure on the rental market that has been seeing a decline in rental options for low-income people for more than a decade, according to housing policy researcher Steve Pomeroy.

It uses data from the Canada Mortgage and Housing Corporation (CMHC) to investigate losses in the rental market.

Pomeroy, a senior researcher at Carleton University’s Center for Urban Research, estimates that between 2011 and 2016, the number of rental units that would be affordable for households earning less than $30,000 per year, with rents less than $750, fell. at 322,600 in Canada.

That has an effect on the one in three Canadians who rent, according to 2016 census data.

Pomeroy says that historically, Quebec offered the largest rental stock available in the country.

“Quebec has always been culturally very different. Renting is much more culturally accepted. It’s a little bit of the European influence… You have these very quaint estates of two-story, three-story houses with the wrought-iron staircase and with three units , and two are rented. So, by definition, two-thirds of its population are renters,” he said.

He says it may be time for the rest of Canada to consider a more European model, where renting is more accepted.

He says there are many cities, in France and Germany, for example, where renters nearly equal homeowners in population.

Historically, North America has had a different culture, where property is considered better.

“Traditionally there has been very strong support for homeownership. Here in Canada we’ve had mortgage insurance that includes greater access to credit for buyers…the political system has really reinforced that belief system, that homeownership it is right”.

In Red Deer, Alta., this two-bedroom townhome rents for $1,220 a month if you opt for the smaller one with no den. It even comes with powered parking stalls. (Sunreal Property Management Ltd./Rentfaster.ca)

But now, anti-poverty and tenant organizations are pushing for more rights for tenants. That’s something Pomeroy sees as a positive change.

He also says he thinks many younger Canadians see renting as their future. It gives them the freedom to seek out experiences, move for work, and not be tied down to property they can’t afford.

Pomeroy recently asked his graduate students, all employed and in their 20s, if they thought they would be able to buy a house in the next five years. Would you like it?

He says he was surprised when he first heard, none of them believed he could.

“No one thought they could, and only half really wanted to.”

The average monthly cost of rental properties across Canada in July was $1,934, up 10.4 per cent from last year, making it even more difficult for renters to find affordable housing. (David Horemans/CBC)

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