National Average Monthly Rent in Canada Reaches $1,360 for Recent Leases
According to a recent report from Statistics Canada, renters in Canada who signed a new lease in the past two years paid an average of $1,360. The report, which draws on data from the 2021 survey, also shows that one in three Canadians is a renter. Post What’s Included in Canadian Rent?” said Rental cost data deserves further attention. The report, released Aug. 23, found that renters tend to have less favorable socioeconomic outcomes, a weaker sense of community, and poorer health than homeowners. In addition, there is still a shortage of affordable housing for low-income Canadians.
It also highlights a notable trend: rental costs are negatively correlated with length of stay. Specifically, the median rent in Canada for a home that has been rented for the past two years is $1,360, while a home with the same tenant for 10 years or more has a much lower median price of $840.
A separate report from Rentals.ca and Urbanation showed in August that the average asking price for a rental unit in Canada hit a record high of $2,042 in June as interest rates rose and the population grew. The report notes that Canada’s average rent has increased by 20 percent over the past two years, or an average of $341.
Also Read: China lowers key interest rates as the economy slows
Housing finance
The Statistics Canada report is based on surveys of renters in 10 provinces and the capital cities of Whitehorse, Yellowknife, and Iqaluit. However, landlords’ profit margins were not included, Blacklock Reporter reported. The Canadian Federation of Apartment Associations (CFAA), which represents owners and managers of rental apartments across Canada, estimated the profit averaged about 8 percent in a June 6 submission to the House of Commons personnel committee.
Some imagine that the landlord pays all or most of the rent, CAFA Chairman John Dickey testified before the committee on June 6. Far from the truth.
On average, 19 percent of rental income goes to operating costs, 14 percent to property taxes and 12 percent to utilities, Dickey said. That means 45 cents of every rental dollar goes to operating costs, leaving 55 cents as net operating income.
However, he emphasized that additional costs should also be taken into account. On average, an additional 36 eras are spent on mortgage repayments and 11 eras on capital repairs and modernization of buildings. That leaves just eight cents on the rental dollar as a pre-tax return for every dollar of income. The House of Commons Personnel Committee is looking into housing finance.
Good luck finding a $1,700 apartment in any Canadian city center right now, said Ray Sullivan, executive director of the Canadian Housing and Renewal Association, who testified before the committee on June 6. He emphasized that these rental costs are the lowest level available to middle-income Canadians.
Half the country couldn’t afford a higher rent than that, he said. Sullivan emphasized the importance of private sector involvement to achieve a balanced approach, given the rapid start of housing construction and the expansion of housing supply. He said most of the supply should go to off-market housing and communities. “We’re not going to solve the housing crisis by adding $5 million to one million-dollar home or $5 million to a $3,000-a-month one-bedroom apartment,” he said.
Also Read: Protests against rising electricity bills in Lahore become violent
Rental costs
In addition to factors such as rental location, home size, and condition, the Statistics Canada report also looked at the effects of non-financial inclusion, including utilities, parking, appliances, and air conditioning. Including rent is an important consideration when comparing rental costs, the report said. The commonly cited rental expense is rarely adjusted for differences in housing quality (including rent recognition).
Data shows that rents in Ontario and Quebec typically include air conditioning, while rents in Manitoba typically include electricity. In Saskatchewan, 60% of rents include parking, compared to 55% in British Columbia. The inclusion of oil, natural gas, and other fuels was higher in different regions, the report said. Fuel-based utilities are most common in Prince Edward Island (55%), the Territory (54%), Nova Scotia (41%) and Alberta (40%). Instead, these utilities are least common in Quebec (12%), Newfoundland and Labrador (15%), and New Brunswick (18%).
