According to a recently released report, several factors have resulted in an unbalanced rental market.
In particular, there has been a boom of owner-occupied housing in the last ten years. This means that developers have started to ignore rental properties in favour of condos which are more profitable.
The result is that the supply of rental housing doesn’t meet demand. According to an article posted on The Huffington Post, “Even though one-third of Canadians rent their homes, only 10 per cent of new builds over the past decade were for rental purposes.”
This causes price hikes which are outstripping income growth and cutting into renters’ standard of living
The problem is made worse by a trend among building owners to convert apartments into condos. According to the report “cities are seeing an overall decline in rental units where the trend is to convert apartment buildings to condominiums, instead of building new condominiums.”
The report further speculates that the rental market crisis will get worse with the new Canadian mortgage rules which will send more people to the rental market.
The FCM argues that the imbalanced rental market could significantly impact Canada’s economic recovery. In the report FCM President Karen Leibovici said that “renewed investment in rental housing is crucial to protect Canada’s economic recovery. It will create new construction jobs, give cash-strapped Canadians more affordable housing options, and ease pressure on the home-ownership market where mortgages account for 68 per cent of skyrocketing household debt.”