National rental prices increase by 3 per cent

National rental prices increase by 3 per cent

Canadian renters saw another year full of affordability concerns as rental prices increased, especially in Vancouver and Toronto.

The Canada Mortgage and Housing Corp's annual rental market report was released last Friday, and it shows the average rent for a two-bedroom unit increased to $1,167, up three percent from 2020 and 2019.

CMHC's chief economist, Bob Dugan, believes the increase is linked to the supply and demand disparity, as well as the varying speeds of economic recovery in cities in across the country, during the most recent phase of the pandemic.

Dugan said Vancouver and the GTA were the cities most affected by affordability issues, as monthly rent for a two-bedroom apartment increased to $1,824 in Vancouver and to $1,666 in the GTA.

When you look at lower income households the mismatch between affordable rentals and the number of households gets worse," stated Dugan.

The CMHC estimates that someone renting a two-bedroom apartment in Vancouver would need to work 198 hours per month just to make up for 30 per cent of their gross income, which is the threshold of affordability. In Toronto, it would take a renter 178 hours per month.

"That person has to work more than full-time or needs a second tenant in the unit with them to make that rent affordable, if they'd like to get it down to 30 per cent of income," said Dugan.

"That's an even bigger mismatch, when you get to that bottom 20 per cent (of earners), so that's something that's a concern to us."

CMHC also examined vacancies in its report - the national vacancy rate was at 3.1 per cent last year, compared to 3.2 per cent in 2020 and the 2.2 per cent back in 2019.

Vacancy rates dropped in 21 of the 37 markets the CMHC monitored. There were increases in the GTA, Winnipeg and Abbotsford-Mission.