A pair of rental tracking services are suggesting average annual rent increases on new listings may level off for Ontarians in the next few months as the province enters a slower-moving season.
Zumper.com is suggesting rent hikes could actually cool off a bit with the weather as the company’s national index has showed a slight slowdown in average increases across Canada.
“The best time to look for a rental is in the winter since most people don’t want to move,” Chen suggested.
“Even though there’s probably lower supply overall, there’s definitely less competition, and a lot of times property owners price down their units to fill vacancies for the holidays.”
Fellow listing service Rentals.ca says the annual rate of rent inflation across Canada did accelerate to a nine-month high in September, but not in the Toronto area.
“It may signal a broader impending moderation for rent inflation in the months ahead as the economy cools and renters face mounting affordability constraints,” the agency said.
“This was visible in the sharp rise in rental activity for shared units.”
Property owners offering up shared accommodations over the past three months in Ontario grew 78 per cent year over year, according to Rentals.ca.
The outlet submits the trend may be spurred on by renters looking to save by obtaining roommates and property owners trying to mitigate soaring mortgage payments.
Average asking rents for shared accommodations checked in around $1,049 in Ontario last month for all dwelling types, an eight per cent annual uptick.
High mortgage rates, little confidence in the economy, and students going back to school were factors contributing to the continuing high asking prices in Ontario during September.
Using Hamilton as an example, Zumper.com spokesperson Crystal Chen says “swelling demand” for rentals last month moved market prices up again across the largest cities in the province.
“Looking back at Hamilton’s historical rents, the city has been climbing steadily in terms of rent prices for the last few years, … reaching its highest point of $1,800 in one-bed units in June … and then stayed around $1,750 to $1,790 since,” Chen revealed.
Hamilton was the 11th most expensive rental market in the nation last month, according to data from Zumper placing a new one-bedroom listing at $1,780, up almost 12 per cent over this time last year.
Rentals.ca says of 35 Canadian cities it tracked in September, Hamilton’s average rent ask for a one-bedroom unit put it at number 18 with a 13 per cent annual bump to an average of about $1,881 per month.
A vacant two-bedroom offering was typically just shy of $2,300, up 7.3 per cent year over year, according to rentals.ca
Zumper’s data had a more moderate increase for two-bedroom accommodations with just a two per cent increase and average price of $2,200 a month.
Hamilton rents are still middle of the pack compared to 10 of Ontario’s biggest municipalities and about $700 cheaper in one-bedroom units compared with neighbouring Toronto, where landlords can ask for close to $2,600 a month.
Both Zumper and Rentals.ca suggest two-bedroom dwellings between Hamilton and Toronto show the steel city is about $1,100 cheaper a month.
The biggest annual increase of the 23 Canadian cities Zumper tracked last month was in Calgary, recording a 27 per cent bump in one-bedroom rates and 26 per cent jump for two-bedroom units.
Vancouver continues to have the highest rents in Canada with a two-bedroom accommodation up about another nine per cent year over year to a staggering $3,960 per month.
Meanwhile, the cost of a single-bedroom rental rose even more on the coast, up 12 per cent to an average of $2,800.
In an odd reversal, St. Catharines and Niagara Falls were two Ontario markets that saw rents decline year over year, with a single bedroom slipping 1.4 per cent and 4.2 per cent, in the last 30 days.
Ontario’s most expensive markets outside of Toronto are still in close proximity to the city.
Oakville, Brampton, Vaughan, Mississauga, Etobicoke and North York had average rents between $2,600 to 2,900 per month among all unit types.
With an average fixed rate mortgage payment in Canada expected to increase between 14 per cent and 25 per cent next year, according to the Bank of Canada forecasts, Chen figures we won’t see the rental market lose much momentum in 2024.
“That’s also driving up a lot of the demand with many consumers opting to stay in the rental market longer, ” she said.
This will last, she continued,”at least until there’s more confidence restored in the economy, which also lowers overall vacancy rates as well.”
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