Rent up 3% from last year even as vacancy rates held steady, Canada Mortgage and Housing Corp. says - CBC News | Canada News Media
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Rent up 3% from last year even as vacancy rates held steady, Canada Mortgage and Housing Corp. says – CBC News

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Canadian tenants faced another year of affordability challenges as rents crept up nationally and were particularly high in Vancouver and Toronto.

The findings from Canada Mortgage and Housing Corp.’s (CMHC) annual rental market report released Friday show the average rent for a two-bedroom home in the 37 areas the federal housing agency studied increased to $1,167 last year, a three per cent rise from $1,128 in 2020 and $1,080 in 2019.

Bob Dugan, CMHC’s chief economist, attributed the rise in rent to a supply and demand imbalance, and said the increase was also affected by the different speeds of recovery cities have experienced in the latest stage of the COVID-19 pandemic.

Vancouver and the Greater Toronto Area, he said, were facing the most severe affordability challenges because those cities held onto the highest average monthly rent for a two-bedroom apartment.

Vancouver rent increased 2.4 per cent to $1,824, while rent in the GTA rose 1.5 per cent to $1,666.

“When you look at lower income households the mismatch between affordable rentals and the number of households gets worse,” he said.

“Last year in Toronto and Vancouver, only 0.2 per cent of the rental universe was affordable for the bottom 20 per cent of earners.”

Canadians need to work more to afford rent

CMHC and Dugan found someone renting a two-bedroom purpose-built apartment in Vancouver would have to work 198 hours per month to keep monthly rent at 30 per cent of their gross income, the threshold of affordability.

In Toronto, it would take 178.3 hours per month, up 7.6 hours from last year.

“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.”

In some markets, where people flocked to find more space when their employers allowed remote work, the year-over-year increase in hours needed to work to keep monthly rent at 30 per cent of a gross income was even more dramatic than what Toronto experienced.

In Peterborough, Ont., where the average two-bedroom unit monthly rent was $1,316, it took 160.5 hours to achieve that feat last year, up 36.7 hours from 123.8 hours in 2020.

In Windsor, Ont., where the average two-bedroom rent rose by more than five per cent to hit $1,154, CMHC estimated it would take 137.8 hours, an 18.6-hour jump from 119.2 hours in 2020.

WATCH | How rent increases are affecting residents of Windsor, Ont.:

‘You have to give up your quality of life’: rent prices out of reach for many Windsorites

29 days ago

Duration 1:24

Aubrey Murray said he has had to sacrifice to find affordable rent. He currently lives in a converted building with several shared spaces. 1:24

This surge could persist if people continue to gravitate to suburban and rural markets, because it will take supply time to catch up, according to Dugan.

“I’m sure that the city planners in some of these smaller communities didn’t have a five-year plan that included a pandemic,” he said.

Montreal’s rental, vacancy rates key

At the other end of the spectrum, Montreal had the lowest rent levels with an average monthly rent of $932 and 105.8 hours needed to keep monthly rent at 30 per cent of someone’s gross income. Along with a look at rental affordability, CMHC also offered a window into vacancies.

The national vacancy rate sat at 3.1 per cent last year, compared with 3.2 per cent in 2020 and 2.2 per cent in 2019.

Rates declined in 21 of the 37 markets CMHC analyzed, including Vancouver, Calgary, Victoria and Halifax, but increased in three locations: the Greater Toronto Area, Winnipeg and Abbotsford-Mission, B.C.

In the remaining 13 areas, including Montreal, vacancy rates held steady.

Montreal’s rate was one of the key factors behind the stability of the overall national vacancy rate because the Quebec city’s rental market accounts for roughly 30 per cent of the national rental market.

Toronto holds about 15 per cent of the rentals in the country, while Vancouver has five per cent.

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Netflix’s subscriber growth slows as gains from password-sharing crackdown subside

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Netflix on Thursday reported that its subscriber growth slowed dramatically during the summer, a sign the huge gains from the video-streaming service’s crackdown on freeloading viewers is tapering off.

The 5.1 million subscribers that Netflix added during the July-September period represented a 42% decline from the total gained during the same time last year. Even so, the company’s revenue and profit rose at a faster pace than analysts had projected, according to FactSet Research.

Netflix ended September with 282.7 million worldwide subscribers — far more than any other streaming service.

The Los Gatos, California, company earned $2.36 billion, or $5.40 per share, a 41% increase from the same time last year. Revenue climbed 15% from a year ago to $9.82 billion. Netflix management predicted the company’s revenue will rise at the same 15% year-over-year pace during the October-December period, slightly than better than analysts have been expecting.

The strong financial performance in the past quarter coupled with the upbeat forecast eclipsed any worries about slowing subscriber growth. Netflix’s stock price surged nearly 4% in extended trading after the numbers came out, building upon a more than 40% increase in the company’s shares so far this year.

The past quarter’s subscriber gains were the lowest posted in any three-month period since the beginning of last year. That drop-off indicates Netflix is shifting to a new phase after reaping the benefits from a ban on the once-rampant practice of sharing account passwords that enabled an estimated 100 million people watch its popular service without paying for it.

The crackdown, triggered by a rare loss of subscribers coming out of the pandemic in 2022, helped Netflix add 57 million subscribers from June 2022 through this June — an average of more than 7 million per quarter, while many of its industry rivals have been struggling as households curbed their discretionary spending.

Netflix’s gains also were propelled by a low-priced version of its service that included commercials for the first time in its history. The company still is only getting a small fraction of its revenue from the 2-year-old advertising push, but Netflix is intensifying its focus on that segment of its business to help boost its profits.

In a letter to shareholder, Netflix reiterated previous cautionary notes about its expansion into advertising, though the low-priced option including commercials has become its fastest growing segment.

“We have much more work to do improving our offering for advertisers, which will be a priority over the next few years,” Netflix management wrote in the letter.

As part of its evolution, Netflix has been increasingly supplementing its lineup of scripted TV series and movies with live programming, such as a Labor Day spectacle featuring renowned glutton Joey Chestnut setting a world record for gorging on hot dogs in a showdown with his longtime nemesis Takeru Kobayashi.

Netflix will be trying to attract more viewer during the current quarter with a Nov. 15 fight pitting former heavyweight champion Mike Tyson against Jake Paul, a YouTube sensation turned boxer, and two National Football League games on Christmas Day.

The Canadian Press. All rights reserved.

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