Rent prices in major markets across the country have slowly reversed course over the last couple of months after a long stretch of significant declines.
But an even stronger resurgence is on the horizon as the pandemic continues to recede amid an accelerated vaccination campaign and the eventual reopening of offices.
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A Rentals.ca report published in late May ties the long-awaited — for landlords anyway — recovery of Canada’s big city rental markets to the lifting of pandemic restrictions, high home prices and the updated mortgage stress test that will keep would-be homebuyers renting for longer periods.
Bullpen Research and Consulting’s Ben Myers, who collaborates with Rentals.ca on their monthly reports, points to the reopening experience south of the border as a sign of things to come for Canada.
“Canada is a couple of months behind the U.S. in the vaccine rollout, and many American cities are fully open with few restrictions, and offices are opening back up. Look for continued flatness until the fall in Canada, and rents to start rising more rapidly at that time,” said Myers.
“The changes to the mortgage stress test and the sharp rise in house prices will encourage more people to continue renting and accelerate the late-year rent increase.”
Although the return to offices and arrival of international students in major markets like Toronto will certainly turn the tide, Myers and the Rentals.ca team believe even a diminished work-from-home trend will still impact rental demand and prices. Smaller units located in Toronto’s downtown core are likely to see lower levels of demand, while more renters will continue seeking out larger suburban units for the foreseeable future.
Rentals.ca’s May report for Toronto also noted that condo apartment rents climbed one percent monthly, but remained down over 11 percent on an annual basis.