Surging growth of rental demand is spurred by unaffordability in Vancouver, along with an influx of immigrants in Montreal, according to the latest edition of IPA’s Midyear Canadian Multifamily Investment Forecast Report.
Amid a burgeoning economy, Greater Vancouver posted a healthy pace of jobs creation, with the workforce growing by 6.7% annually in June (roughly 93,100 new employment posts).
Despite the expanded purchasing power, however, Vancouver is far and away still the most expensive housing market in Canada. The benchmark price for single detached homes currently exceeds $1.4 million, and the median mortgage payment is around $4,000 greater than the market’s average rental rate.
These pose formidable barriers, especially for young households and first-time buyers. Many of them are thus forced into rental housing – itself beset with its challenges, as vacancy was at a mere 1% as of the end of 2018.
Meanwhile, in Montreal, the provincial government’s immigration policy is paving the way for even more demand among non-locals. This will augment last year’s approximately 28,200 non-permanent residents (mostly students and temporary workers) originating from overseas.
“An estimated 16,000 households will be created this year, partly supported by a simpler immigration system than the U.S. that has lifted foreign entry numbers substantially,” IPA stated.
And this is most likely just the beginning: An RBC Economic Research earlier this year said that the Canadian government is looking to boost its annual immigration targets, from 330,000 in 2019 to 350,000 by 2021.
The average rent in the market increased by 4.1% year-over-year, to $797 per month. Average prices grew by 6% year-over-year, to $154,400 per unit.
The tech industry is also providing a significant boost to Montreal, especially because the city plays host to multiple globally-acclaimed universities “along with industry-leading artificial intelligence and entrepreneurial programs.”
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