As the cost of entry for home ownership continues to defy gravity in the Waterloo-Wellington area, it was always inevitable that we’d eventually see a consequent bump up in average monthly rents here, too. People need somewhere to call home – and when they’re being priced out of home ownership in ever-greater numbers, they turn to the rental market.
There’s a yin and a yang to this dynamic, and they’re ones that have become familiar to anyone who’s been following along with the dramatic changes within Southwestern Ontario real estate markets that have occurred over the past year. As more and more office workers have been telecommuting as opposed to being present physically in a shared workspace, many people have come to realize that the newfound irrelevance of proximity to their company HQ enables them to save substantial amounts of money on their cost of living – namely, what they’re paying for housing.
Larger urban centres like Toronto, Vancouver and Montreal have seen net losses in residents since the pandemic set in last March, while smaller surrounding urban areas like Kitchener-Waterloo have seen significant increases as this remote workforce seeks out more budget-friendly accommodations. A recent report released by Pad Mapper clearly outlines the practical impact of these demographic changes on average rental rates for a one-bedroom apartment in urban areas across the country.
While Vancouver and Toronto respectively remain, on average, the two most expensive rental markets in Canada, both have witnessed a steep decline in monthly rates. Vancouver’s market for one-bedroom rentals has fallen by a full 9.8% since last February, according to Pad Mapper’s data. In Toronto, this collapse has been even more precipitous – a decrease of 23% over the past year. While Montreal (down 8% since last year) remains inside the top-10 most expensive markets in the country, it has been overtaken by Kitchener-Waterloo for eighth position – the average price of a one-bedroom apartment here in KW is now $1,390/month. That’s an increase of 5.3% since last February! Kitchener-Waterloo’s climb into eighth position also marked the most positions gained over the past year by any city other than Halifax, which also climbed two spots.
The story of increasing average rent is much the same in smaller urban centres elsewhere; in places like Kelowna, BC (up 7.4%), Hamilton, ON (up 4.6%), Barrie, ON (up 13.8%) and St. John’s, NL (up 3.7%). The dynamic here is unmistakable – people are leaving the big cities in large numbers and opting to settle in surrounding communities with a lower cost of living.
When we turn to look at the average increase in rental rates over just the past month, the Kitchener-Waterloo market stands out even more. Our increase of 3% just since mid-January is bettered in the entire country by only Windsor and Barrie (up 5.9% and 4.4%, respectively). The bottom line? Our housing market is red-hot right now in virtually every department. No matter the style, no matter the type – prices have gone up significantly as a result of this pandemic.
