“For much of the last 40 years, demand for rental housing has been remarkably consistent, while on the supply side, new construction has been minimal,” said the new report from CBRE.
“While a small number relative to existing stock, the construction resurgence of purpose-built rental buildings is a new feature to a largely stable market.”
As home prices rise in Canada’s hottest markets, the inability of many Canadians to purchase is keeping the demand for rentals very strong – the report called this trend “one to watch”.
“Affordability issues are most pronounced in cities such as Vancouver
, but all of Canada is characterized by relatively high home prices, particularly when compared to most of the U.S.,” stated the report.
“On the other hand, incomes and apartment rents continue to rise largely in lock-step. Should interest rates rise, and if prices don’t see a corresponding decrease, demand for rental real estate is almost certain to be further heightened.”
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Purpose-built multi-family starts in 2014 were up 52.2 per cent from the five-year average, signaling a resurgence of the rental markets in Canada’s largest cities.