What's up with Canada's Rental Prices?
The COVID-19 pandemic has been wreaking havoc on the Canadian economy for about half a year now, and rental rates across the country are not exempt from these effects.
Rental rates are rapidly falling and soaring in different parts of the country. Depending on where renters and landlords live, they can benefit from this scenario or find themselves at an unfortunate disadvantage.
As someone who rents in Toronto, I am no stranger to how the city has reworked itself to accommodate local and global circumstances, nor do I lack the experience in navigating these circumstances regarding my budget and financial situation.
Why are rental prices changing so drastically in Canada?
When COVID-19 became a widely known issue in Canada and the lockdown period began back in March, I remember reading up on how this issue affected my finances.
The stressful knowledge that I might lose work and begin relying on governmental benefits already had me panicking, considering the hefty cheque I was writing each month to pay rent in my two-bedroom apartment just outside of the city.
But, despite the tumultuous months of financial stress, when it came time to go apartment hunting again, I was surprised by many of the rental prices that I saw.
According to Rentals.ca’s October rent report, Canadian rental prices are down this month. In September, the average rent for Canadian listings on rentals.ca was $1,769 per month, which is down 9.5% annually.
Padmapper, a Canadian rental site, also reported that some of the most expensive Canadian cities such as Vancouver, Toronto, and Montreal have been facing declines in rent prices throughout the pandemic.
Canada has faced some of the most drastic rental changes worldwide during the past six months.
But, it’s not just falling that rent prices are doing. Some of them are rising too. Smaller cities, many within commutable distance of bigger cities, are seeing rises in the cost of rent.
If you’re confused by the why of all these changes, you’re not alone. The rise vs. fall we’re currently seeing in rent prices across the country might seem contradictory, but there are some explanations for why this is happening right now.
And it’s important to be informed about these things as a renter trying to navigate the best living situation for you during these crazy times!
The story lately has been a lack of overall inventory,
Remote living is changing everything, include the demand for rental housing
The way we function right now is different from how we did pre-pandemic; I think we all figured that out by now!
However, these functional changes have inevitably changed the functions of things on a larger scale, not just in our personal lives.
With most work, schooling, and even social activities transitioning to remote environments, the need for rental housing is quickly becoming less.
Many post-secondary students have moved home with their parents to partake in online classes, and working people have moved out of the city’s hub, considering they don’t go into their place of work.
Not to mention that immigration is at a standstill with so many travel restrictions put in place.
Big cities across the country are home to the bustling aspects of life, and when everything has shut down, where will everyone go?
Now, fewer renters seek spaces in big cities that have led to price drops in rental rates as landlords desperately try to secure tenants.
Meanwhile, where have these tenants headed? Aside from those who have decided to quarantine or move in with loved ones. Many people have made their way to the outskirts and suburbs of the big cities that they hail from. And consequently, rental prices in these areas have increased.
My rental experience: How I Saved Money!
I can’t speak for everyone, but what I can say from personal experience is that these rental costs changes have had a positive impact on my quest to seek rental housing.
My line of work can be pretty fickle, especially right now, so finding a place to rent in Toronto that I could afford with a fluctuating budget was essential.
I decided to move out of the suburbs when I moved this fall. When I moved to my last apartment, it was more affordable to live in the suburbs.
I got a larger space, and all I had to do was tackle a bit of a lengthy commute (and its cost) to school.
This, however, saved me from living in an unsafe neighborhood close to my campus, where I’d previously shared a house with 12 other people for the same price.
With my work becoming exclusively remote, graduating from university, and realizing that I didn’t need as much space as my suburban paradise was providing me, I knew I needed to find a new place to live. I wanted it to be in the city and closer to things I’d been missing.
I was surprised at how quickly I found an apartment I could afford and met my other needs. The last time I’d been apartment hunting, it took two months, and this time around, I had secured a place within a week of my search.
I found a lot more affordable options within the city than I’d ever found during an apartment hunt before, was able to book near-immediate showings, and in the blink of an eye, could officially say I’d be living in the city.
What do these rental prices mean for the future?
Despite what it might look like, this doesn’t necessarily mean housing is becoming more affordable. You may be able to benefit from this in the meantime if you’re considering housing in some of Canada’s more expensive cities, but things could change before you know it.
Lower prices present an easy opportunity for institutional investors to take advantage and disproportionately profit off units.
These changing rental prices are something to keep an eye on if you’re looking to rent or currently rent. You might be able to snag a deal if you’re in the right place at the right time.