The Montreal rental market has rarely been so bubbling. Last year, the average rent for a two-bedroom apartment rose by 5.4% in the metropolitan area, thus crossing the symbolic threshold of $1,000, whereas it was estimated at $760 in 2015. And meanwhile, the price spike continued in Toronto.
The number of units available for rent in the Montreal area, which had increased slightly in the context of the pandemic, fell again last year. The housing vacancy rate in the region has thus fallen from 3% to 2% in the metropolitan area and from 3.7% to 2.3% on the island of Montreal, show data released Thursday by the Canadian Society. of Mortgages and Housing (CMHC).
This tightening of the rental market is partly explained by the strong recovery of immigration to Quebec last year, after the decline experienced at the start of the pandemic. The rapid rise in property values in the Montreal area in recent years has also encouraged many aspiring buyers to stay on the rental market, which increases the pressure on it, details CMHC in an extensive report.
“If anyone still doubted it, with today’s CMHC report, there is no longer any doubt: there is a housing crisis “, declared Thursday the director of public affairs of the Corporation of real estate owners of Quebec (CORPIQ), Marc-André Plante, when contacted by The duty.
The housing vacancy rate thus tightened in downtown Montreal and in certain student boroughs, notably Côte-des-Neiges–Notre-Dame-de-Grâce. However, it is in the boroughs of Plateau-Mont-Royal (1.7%), Verdun (1.4%) and Montréal-Nord (0.3%) that the rates of housing available at the rental among the lowest. This percentage reaches 1% in the east of Montreal.
Jump in rents
The average rent for a two-bedroom apartment rose 5.4% in the Montreal area last year to $1,022, its strongest growth in 20 years, according to CMHC . This increase was 5.6% on the Island of Montreal for 4 1/2 apartments and 5.2% for all dwellings.
“When we see that vacancy rates are lower, we see that rents are rising more quickly,” says CMHC analyst Francis Cortellino. The increase in building operating and renovation costs in recent years may also have played a role in the rapid growth of rents in the Montreal area, but also elsewhere in Quebec, he adds.
Questioned on the sidelines of the pre-sessional caucus of the Future Quebec Coalition, in Laval, the Minister responsible for Housing, France-Élaine Duranceau, offered to help the community sector and the private sector to “accelerate the pace” of housing creation in order to counter the current “shortage”. As for the increases in rents noted by the CMHC, they are symptomatic of theinflation in Quebec, she noted.
CMHC nevertheless notes a significant gap between the average rent increase suffered by tenants who have remained under the same roof — 3.5% — and that of units which welcomed new tenants last year — 14.5%. %. A situation which is explained by the fact that landlords have the easy game of adjusting rents to the reality of the market when a tenant leaves his dwelling, which is not possible in the case of a lease renewal. .
In this context, “yes, we must increase the supply, but we must increase the supply of housing at prices that meet the ability to pay of low- or middle-income tenants”, in particular by focusing on social housing, argues the spokesperson for the Popular Action Front in Urban Redevelopment, Véronique Laflamme.
Marc-André Plante, from CORPIQ, believes that the Legault government must help developers to reduce their construction costs so that they can offer rents at better prices in new building constructions.
The vacancy rate for housing in the suburbs of the island of Montreal remained very tight, around 1%, despite the construction of thousands of new apartments in the north and south shores of the metropolis. last year.
Difficult situation in Toronto
The swelling in rents also continued in metropolitan Ontario. A record number of units were built in the Greater Toronto Area, without reducing the average price, which reached $1,765 for a two-bedroom unit.
As in Montreal, the rebound in immigration after the COVID crisis, the return of young people to the labor market, the return of students to campuses and the rise in mortgage rates – and therefore the decrease in the number of purchases property — would be at issue.
If the average price of housing has increased so much in Toronto, it is also partly due to the significant turnover of tenants observed in the Ontario capital. The growth in rents in the Queen City and its surroundings was 2.3% for dwellings which had not changed tenants in the last 12 months, against 29% for dwellings which had seen their occupants change. “If there is a change of tenant, there is no control [dans l’augmentation des loyers] said CMHC’s Francis Cortellino.
This gap is much narrower in the Montreal region, although it is significant there as well. The difference between Toronto and Montreal in this regard is reflected in the evolution of the housing crisis in Canada’s two largest cities for several years. In Toronto, the challenges that await tenants looking for an apartment remain immense, and no bright spot seems to be on the horizon.
With Marco Belair-Cirino
This report is supported by theLocal Journalism Initiativefunded by the Government of Canada.