2024-01-31 19:07:30
As elsewhere in the country, the cost of rent in the Montreal region continued to rise in 2023. Inflation and real estate market conditions led to the strongest increase in at least 30 years, reveal data published Wednesday by the Canada Mortgage and Housing Corporation (CMHC). And the housing vacancy rate has fallen further, reaching a rate of 1.5% in 2023 in the Montreal region, compared to 2% the previous year.
“Housing supply is struggling to keep up with the strong growth in demand supported by record migration, employment and high property costs,” underlines the CMHC annual report.
The organization specifies that the strong demand for rental housing in Quebec is explained by demographic growth. Net migration has more than doubled in Quebec in 2023 with the arrival of a record number of non-permanent residents, it is noted.
“There has been a lot of apartment construction in recent years, especially concentrated in large metropolitan areas, for example in Montreal, Quebec and Gatineau. On the other hand, demand is very strong. And there is a sharp slowdown in homeownership, people are freeing up fewer homes to buy a condo or a house,” explains Francis Cortellino, economist at CMHC, in an interview with Le Devoir.
Eroded affordability
The average increase in rent for two-bedroom apartments was 7.9% in the Montreal region, reaching $1,096. Rents have thus increased more quickly than the average salary in the region, which has increased by 4.5%, underlines the CMHC report, which notes that the affordability of the rental market has continued to erode. Additionally, the vacancy rate for the cheapest rents is very low, at 1%.
Unsurprisingly, we notice significant differences in the evolution of housing prices when there is a change of tenants. Thus, the average rent for a two-bedroom unit that has welcomed a new tenant is $1,300 in the Montreal region, compared to $1,052 for a unit that has not changed occupants. Across urban regions of Quebec, the average rent increases for housing that has changed tenants is 17.4% compared to 5.6% for other housing. The CMHC also indicates that the housing crisis encourages tenants to stay where they are, as evidenced by the turnover rate of less than 10% last year, compared to around 17% from 2016 to 2019, i.e. before the pandemic.
If the vacancy rate rises to 1.5% in the Montreal region, it rises to 3.2% in the city center, 1.9% in Notre-Dame-de-Grâce and 0.6 % in Plateau-Mont-Royal.
Crisis throughout Quebec
Mr. Cortellino points out that the different regions of Quebec have also experienced a tightening of rental supply. Housing construction has progressed outside major centers, but not at the same level as population growth.
“The regions have experienced an increase in population in recent years, but it is because of the pandemic,” indicates Francis Cortellino. “There are many people who have left large centers like Montreal or the suburbs to settle in smaller municipalities. Vacancy rates in the regions are below 2%. »
In the Quebec region, the vacancy rate fell to 0.9% — the lowest level in 15 years — and rent increases reached 4.8%. In Gatineau, 1.1% of housing is available while rent increases are close to 9%.
The rental market situation is similar elsewhere in Canada. Across the country, the vacancy rate for apartments intended for rental reached 1.5% in 2023, while it was 3.1% in 2020 and 2021. Furthermore, the increase in rent average jumped 8% in 2023, compared to 5.6% the previous year. In Calgary, for example, the increase reached 14.3%. If vacancy rates fell significantly in Toronto, Montreal, Calgary and Edmonton, they were stable in Vancouver and Ottawa, notes the CMHC.
Consternation
The Regroupement of housing committees and tenant associations of Quebec (RCLALQ) says it is “dismayed” by the data published by the CMHC. The organization notes that rental prices over the past 20 years have increased much faster than inflation. “A household’s main expense is paying rent each month and this expense has become unsustainable. Housing owners take advantage of their quasi-monopoly situation to impose excessive rent increases,” estimates Cédric Dussault, spokesperson for the RCLALQ.
The RCLALQ is demanding that the government introduce rent control measures, including a rent register, in Bill 31 from the Minister of Housing, France-Élaine Duranceau.
The Popular Action Front for Urban Redevelopment (FRAPRU) also calls for rent control measures and urges the Quebec government to finance the construction of 50,000 housing units in five years.
In contrast, the Corporation of Real Estate Owners of Quebec (CORPIQ) considers the rent increases noted by the CMHC to be “relatively moderate”, taking into account the growth in costs that owners are faced with, inflation and rental rates. high interest. According to CORPIQ, more than 100,000 additional housing units are needed in the Quebec market.
However, CMHC is not optimistic for 2024 since it anticipates a slowdown in supply growth. “In recent months, fewer construction sites have started due to rising construction and financing costs,” notes CMHC.
With Sarah Boumedda
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