The homeownership rate in Canada has declined about 2.5 percentage points (as of the last census) after peaking at 69% in 2011, says Rachel Battaglia of RBC Economics in a note, adding demographic shifts and the rising costs of ownership have increased the popularity, and necessity, of rental housing. Canadian home builders have responded, starting construction on 240,000 homes in 2023 which would have been a 36-year high if not for a short-lived spike earlier in the pandemic, says Battaglia. This year, builders are 11% above the pace set in 2023 and most homebuilding is in new rental construction projects, which have nearly doubled from six years ago. “Rental housing starts reached the highest in decades in 2022 and 2023 with more than 80,000 new units started each year,” says Battaglia. "That number is set to rise even more in 2024 as surging demand and new policy measures tip the scale for developers despite persistently high inflation challenges and skilled labour shortages.” “There hasn’t been this much rental housing under construction in Canada in a generation, which is encouraging news given the acute supply shortages across the country. But even more construction will be needed as rental demand continues to rise rapidly in the years ahead.” .But, as in the ownership market, the cost of rentals is increasing with increased demand, as new units are absorbed when they come to market, putting pressure on prices. “Rental housing is also slipping out of reach for many as more Canadians move into the rental market,” says Battaglia. “A severe market imbalance has put a lot of upward pressure on rents, bringing annual rent growth to its fastest pace on record, reaching 8% in 2023, well-outpacing inflation (3.9%) and wage growth (2.8%).” Despite the increased construction activity, the rental vacancy rate declined to an all-time low of 1.5%, well below the equilibrium level of 3% in virtually all census metropolitan areas, says Battaglia. “Demand for rentals has increased more than three times faster than the purpose-built rental stock has grown between 2017 and 2023,” she says. “Other types of rental units such as condo apartments and secondary suites have filled part of that gap, but they have also come up short. Rental vacancy rates for condos are even lower than for purpose-built rental apartments, dropping to 0.9% in Canada last year.” Builders are putting more focus on the rental supply shortage and policymakers have responded with zoning changes and incentives to promote high density and rental housing developments, but more needs to be done, says Battaglia. “Together, strong demand for rental accommodation and government support have contributed to a substantial uptick in rental construction while most other types of development projects are at a standstill. We expect policies in Canada’s latest Housing Plan will help carry this momentum forward,” she says. “The ramp-up of rental housing starts is welcome and should help rebalance Canada’s rental housing market over time.” “The challenge, though, will be delivering units Canadians can afford in the right locations. Steep development and construction costs, along with restrictive (although easing) zoning policies still pose serious challenges to growing the supply of affordable rental housing.” .This is what the Western Standard is up againstThe Trudeau government is funding lies and propaganda by directly subsidizing the mainstream media. They do this to entrench the powerful Eastern, woke and corrupt interests that dominate the political, social and economic institutions in Canada. Federal authorities are constantly trying to censor us and stop us from publishing the stories that they don’t want you to read. Ottawa may weaponize our taxes and police against us, but we’ve got a powerful ally on our side.You. Free men, and free women. We need you to stand with us and become a member of the Western Standard. Here’s what you will get for your membership:Unlimited access to all articles from the Western Standard, Alberta Report, West Coast Standard, and Saskatchewan Standard, with no paywall. Our daily newsletter delivered to your inbox. .Access to exclusive Member-only WS events.Keep the West’s leading independent media voice strong and free.If you can, please support us with a monthly or annual membership. It takes just a moment to set up, and you will be making a big impact on keeping one the last independent media outlets in Canada free from Ottawa’s corrupting influence.
The homeownership rate in Canada has declined about 2.5 percentage points (as of the last census) after peaking at 69% in 2011, says Rachel Battaglia of RBC Economics in a note, adding demographic shifts and the rising costs of ownership have increased the popularity, and necessity, of rental housing. Canadian home builders have responded, starting construction on 240,000 homes in 2023 which would have been a 36-year high if not for a short-lived spike earlier in the pandemic, says Battaglia. This year, builders are 11% above the pace set in 2023 and most homebuilding is in new rental construction projects, which have nearly doubled from six years ago. “Rental housing starts reached the highest in decades in 2022 and 2023 with more than 80,000 new units started each year,” says Battaglia. "That number is set to rise even more in 2024 as surging demand and new policy measures tip the scale for developers despite persistently high inflation challenges and skilled labour shortages.” “There hasn’t been this much rental housing under construction in Canada in a generation, which is encouraging news given the acute supply shortages across the country. But even more construction will be needed as rental demand continues to rise rapidly in the years ahead.” .But, as in the ownership market, the cost of rentals is increasing with increased demand, as new units are absorbed when they come to market, putting pressure on prices. “Rental housing is also slipping out of reach for many as more Canadians move into the rental market,” says Battaglia. “A severe market imbalance has put a lot of upward pressure on rents, bringing annual rent growth to its fastest pace on record, reaching 8% in 2023, well-outpacing inflation (3.9%) and wage growth (2.8%).” Despite the increased construction activity, the rental vacancy rate declined to an all-time low of 1.5%, well below the equilibrium level of 3% in virtually all census metropolitan areas, says Battaglia. “Demand for rentals has increased more than three times faster than the purpose-built rental stock has grown between 2017 and 2023,” she says. “Other types of rental units such as condo apartments and secondary suites have filled part of that gap, but they have also come up short. Rental vacancy rates for condos are even lower than for purpose-built rental apartments, dropping to 0.9% in Canada last year.” Builders are putting more focus on the rental supply shortage and policymakers have responded with zoning changes and incentives to promote high density and rental housing developments, but more needs to be done, says Battaglia. “Together, strong demand for rental accommodation and government support have contributed to a substantial uptick in rental construction while most other types of development projects are at a standstill. We expect policies in Canada’s latest Housing Plan will help carry this momentum forward,” she says. “The ramp-up of rental housing starts is welcome and should help rebalance Canada’s rental housing market over time.” “The challenge, though, will be delivering units Canadians can afford in the right locations. Steep development and construction costs, along with restrictive (although easing) zoning policies still pose serious challenges to growing the supply of affordable rental housing.” .This is what the Western Standard is up againstThe Trudeau government is funding lies and propaganda by directly subsidizing the mainstream media. They do this to entrench the powerful Eastern, woke and corrupt interests that dominate the political, social and economic institutions in Canada. Federal authorities are constantly trying to censor us and stop us from publishing the stories that they don’t want you to read. Ottawa may weaponize our taxes and police against us, but we’ve got a powerful ally on our side.You. Free men, and free women. We need you to stand with us and become a member of the Western Standard. Here’s what you will get for your membership:Unlimited access to all articles from the Western Standard, Alberta Report, West Coast Standard, and Saskatchewan Standard, with no paywall. Our daily newsletter delivered to your inbox. .Access to exclusive Member-only WS events.Keep the West’s leading independent media voice strong and free.If you can, please support us with a monthly or annual membership. It takes just a moment to set up, and you will be making a big impact on keeping one the last independent media outlets in Canada free from Ottawa’s corrupting influence.
