Average two-bedroom purpose-built rentals in Waterloo Region around $1,500 per month, CMHC

The latest Rental Market Report from the Canada Mortgage and Housing Corporation shows the average two-bedroom purpose-built rental in Waterloo Region, rang in at $1,469 per month, up about 7.2% compared to previous years.

The definition of purpose-built rentals means a project with five or more dwelling units that are intended to be used for rental housing.

The report notes that rise in those types of rents, outpaces growth seen even in major markets, such as Toronto.

“This pace of increase is extremely high for KCW (Kitchener, Cambridge and Waterloo) and outpaces the growth seen in other centres, including Toronto, Guelph, and London.”

When it comes to what places are available to move into, the CMHC’s numbers show there are few affordable options, with a historically low purpose-built vacancy rate.

The lowest in fact, that we’ve seen in Waterloo Region over the past 20 years.

Students partially getting the blame here, with the report showing non-permanent residents were a “major driver behind increased demand.”

“Rising rents and very high non-shelter inflation across the country have combined to prevent an increase in purchasing power. The low availability of affordable units was a critical challenge. No more than 5 per cent of units were affordable to renters with incomes in the bottom quintile, and 0 per cent of those units were vacant.”

Those looking for places to rent, may be doing so to avoid the higher cost of owning a home, with the report showing Kitchener and Waterloo specifically have a high number of units currently under construction.

“These additions were primarily in Kitchener and Waterloo and were driven by increases in 200+ and 50-to199-unit structures. Additionally, there were approximately 650 additional rental condominiums.”

Another interesting note from the report, a boom in jobs in the high-paying professional, scientific and technical services industries, had more residents looking for higher-end units.

“Employment grew in KCW from October 2021 to October 2022, with almost 10,000 more jobs (3 per cent growth compared to Toronto’s 0.8 per cent). This growth likely contributed to stronger demand for higher-end purpose-built and condominium rental units.”

The full report can be read here.