Affordability in the rental market slowly increasing in the region: CMHC

The Canadian Mortgage and Housing Corporation’s (CMHC) annual rental market report shows an increased supply of rental units and rent increases stabilizing across the country.

An increase in the number of purpose-built rental units led to a vacancy rate of 2.2 percent this year. Last year it was 1.5 per cent.

The average rent for a 2-bedroom unit increased by 5.2 per cent while last year it increased by a record 8.0 per cent.

The rental market in Waterloo Region followed suit with an increase in the rental vacancy rate — the highest since 1993 — while rent increases slowed year-over-year.

Anthony Passarelli, CMHC Lead Economist for Southern Ontario told 570 NewsRadio the cap on international students has had a major impact on vacancy, particularly in two areas of the Region.

“In Waterloo specifically and in the Kitchener East area where the Conestoga College main campus is, there were pretty significant changes to vacancies there. A lot of that had to due with fewer student renters due to the international student cap.”

Passarelli said the Region’s focus on purpose built rental construction is also having a significant impact on keeping a reign on rent prices by adding supply.

“There is still a fair amount of supply that will come on screen in the next few years, on the rental side. Which bodes well for putting less pressure on rents to grow, potentially putting vacancy rates higher. It’s all positive news with the new supply in terms of getting closer to affordability.”

But, Passarelli acknowledges that finding an affordable rental unit is still quite difficult. He said that’s due to the fact that older units that still qualify for rent control in Ontario simply aren’t coming to market. He said people living in those units are staying longer and not looking for other options because newly built rental units cost more on a monthly basis.

Yet, Passarellis said the region is moving in the right direction.

“You have more supply coming on the market and the potential for demand to continue to level off or slow down because of the international student cap in particular. You (the region) are working towards more options for renters, less rent growth. You know, all the things that are positive towards affordability.”