worst rental supply deficit<\/a> in Canada.<\/p>\n\u201cGovernment investments in rental housing will continue to add to the rental universe but expect [the province\u2019s] rental vacancy rate to remain stubbornly lower than the long-term average due to continued strong demand from immigrants settling in Ontario and existing renters opting to remain in rental longer until they have a sufficient down payment to qualify for a mortgage loan,\u201d wrote Navarrete in the Central 1 Housing Forecast.<\/p>\n
Unfortunately, the main takeaway here for Ontario renters is monthly rents will continue to climb above inflation as long as this sharp disparity exists between rental supply and persistent demand. Navarrete singles out Toronto, Ottawa-Gatineau, London, Kitchener-Cambridge-Waterloo and Hamilton as markets where rental prices will log especially steep increases and bidding wars will keep intensifying. These cities will feel the strain on their rental markets particularly acutely because they are set to absorb the most new residents to the province.<\/p>\n
There is hope for a rental unit supply uptick in the next few years, but for those looking for a new rental this year, it\u2019s unlikely to offer much relief. The provincial government under Premier Doug Ford rolled back the rent control measures introduced by the Wynne Liberal government just a couple years earlier. With more flexibility to price rental units in response to market demand, investors are more likely to see condos as a solid long-term moneymaker and purchase units to add to the rental market.<\/p>\n
These investor-owned condos are known as the \u201csecondary rental market\u201d since they are not built for the sole purpose of being added to the rental pool. Purpose-built rental units are known as the primary rental market.<\/p>\n
The caveat is that the positive market changes this policy shift from the Ford government intended to inspire won\u2019t be felt for at least a few years.<\/p>\n
\u201cIf we see a large number of investors entering the market today, with the average completion time of high-density housing such as condo apartments anywhere from two to three years from the time shovels hit the ground, it wouldn\u2019t be until after 2022 when the increased rental market supply will alleviate some of the pressures from the primary rental market,\u201d wrote Navarrete.<\/p>\n
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