Rents are expected to continue rising in many Canadian markets according to a new report.
Rentals.ca says that annual rent growth could reach 7% in Toronto, 5% in Montreal, 4% in Ottawa and 3% in Vancouver, boosting returns for investors but further challenging stretched household budgets for renters and weakening their ability to save for a down payment.
The firm’s survey of CMHC senior analysts, data analysts, economists, developers, affordable housing advocates, investors and city councillors from across Canada reveals that creative thinking and collaboration is required to address affordability issues.
"Affordability will remain a major issue in 2020," said Matt Danison, CEO of Rentals.ca. "We will see more short-term rental regulations, vacancy taxes, co-living developments, smaller apartment units, telecommuting, and millennials living with their parents longer."
Danison hopes that investors and developers focus more on building more rentals in major metro areas rather than continuing a condo frenzy.
The experts polled are expecting more areas to tackle affordability by increasing density. Others see an increasing number of renters choosing lower cost secondary markets even though it lengthens their commute.
"The mortgage stress test, expanded rent control, changing AirBnB legislation, rapid population growth, and record rental housing construction continues to disrupt the balance between supply and demand," says Ben Myers, president of Bullpen Research & Consulting.
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