As rent prices spiked over the past two months, affordable pockets of rental housing became harder and harder to find.
In July, the average monthly cost for rental properties across Canada was $1,934 — up 10.4 per cent over last year, according to the data of the property listing company Rentals.ca. A similar hike in June saw the average rent spike 9.5 per cent.
Analysts say the steep prices are being driven by more demand than inventory.
And that demand is being driven in part by some people fleeing larger cities, while others flock to them.
This creates a challenge for people like Joan Alexander.
The senior has rented homes across Canada, in St. Catharines, Ont., and Guelph, Ont., then in Castlegar, B.C., and for the past two years on Prince Edward Island.
Joan Alexander, left, sits with her dog Beau and her partner, Elizabeth Huether. They plan to move from P.E.I. to Lloydminster, Alta./Sask., this October. (Submitted by Joan Alexander )
Alexander and her partner chose Summerside, a city about 50 kilometres northwest of Charlottetown, for its small-town feel.
But rising rental costs and other considerations — like proximity to health care — are driving her to relocate.
“We really hoped that P.E.I. would be our last stop on our life journey,” she said.
Finding affordable rental housing in Canada after a pandemic is proving a challenge for many, with spiking interest rates, inflation and limited rental stock.
Ben Myers, president of Bullpen Research and Consulting, a real estate advisory firm that tracks rental pricing in Canada, says if you are looking for a deal there still are some places he’d describe as comparatively “cheap.”
This two-bedroom in Lloydminster, Sask., offers a 1,000 square foot corner unit in a quiet building for $1,250 per month. (Aspen Grove/Kijiji)
He suggests looking at Red Deer or Lethbridge in Alberta, or Saskatoon.
“You can get a two-bedroom for under $1,150 a month. It’s all about where you can work,” said Myers.
Alexander says she was able to find a few havens on the Prairies.
“It felt almost too good to be true. There seemed to be a few pockets where we could find what we were looking for. Pet friendly, affordable, safe housing,” said Alexander, who needs monitoring after donating a kidney and a place that welcomes her small, beloved dog — Beau.
Lloydminster — a city that spans Alberta and Saskatchewan — attracted Alexander and her spouse with affordable prices and a pet-friendly property owner.
They move in October to their new $1,200-per-month home.
WATCH | Priced out by rising rents:
Soaring prices leaving some renters priced out
1 day ago
Duration 2:03
While the housing market may be cooling down, the rental market is on fire, with the price of an average unit up 10 per cent compared to last year. That has left many renters scrambling to find suitable housing.
Rentals.ca listings include detached and semi-detached homes, townhouses, condominium apartments, rental apartments and basement apartments. The company can’t provide an average rent for all cities. Some smaller communities don’t have enough rentals to get an accurate average.
So it’s worth hunting. There are some hidden gems.
Myers says that in a normal year, rent can fluctuate on average three to five per cent. But average rents grew 10 to 12 per cent in 2019, due to a shortage of supply, he says. Then the pandemic hit and rent declined, on average, 15 to 20 per cent.
“We are now adjusting back to pre-pandemic levels,” said Myers.
Renters on the move
Then there are the super-expensive anomalies — like Vancouver, which rebounded even faster from the pandemic, with a per month average rent of $2,300 in June 2022.
Myers says there have also been significant shifts to cities that used to enjoy low rent, as some people migrate to smaller places where they can get more real estate for their dollar.
Retiring Baby Boomers from the Toronto area are creating demand and raising prices in places like the Niagara Region and Halifax, for example.
“Halifax has gone kind of nuclear. Definitely a lot of Ontarians moved to Halifax during the pandemic,” Myers said.
Also, he says a lot of students stayed in their university towns like Victoria, London, Ont., and Kingston, Ont., when offices closed during the past two years.
“All the benefits of living in a big city were almost bad because you didn’t want to be around a lot of people during a pandemic,” said Myers.
Vanishing affordable rentals
But all this change has just put more pressure on the rental market that’s been seeing declines in rental options for low earners for more than a decade, according to housing policy researcher Steve Pomeroy.
He uses Canada Mortgage and Housing Corporation (CMHC) data to probe losses in the rental market.
Pomeroy, the senior research fellow for the Centre of Urban Research at Carleton University, estimates that between 2011 and 2016, the number of rental units that would be affordable for households earning less than $30,000 per year — with rents below $750 — declined by 322,600 in Canada.
That has an effect on the one in three Canadians who rent, according to 2016 census data.
Pomeroy says historically Quebec offered the largest rental stock available in the country.
“Quebec has always been culturally very different. Rent is much more culturally accepted. It’s a bit about European influence … You get these very scenic estates of two-, three-storey homes with the wrought iron staircase and with three units, and two are rented. So by definition, two-thirds of your population are renters,” he said.
He says perhaps it’s time for the remainder of Canada to consider a more European model, where renting is more accepted.
He says there are many cities, in France and Germany for example, where renters almost match owners in population.
North America historically has had a different culture, where owning is seen as better.
“Traditionally there has been very strong support for home ownership. Here in Canada we’ve had mortgage insurance including increasing access to credit for buyers … the political system has very much reinforced that belief system, that ownership is the right thing to do.”
In Red Deer, Alta., this two-bedroom townhome rents for $1,220 per month if you opt for the smaller one with no den. It even comes with energized parking stalls. (Sunreal Property Management Ltd./Rentfaster.ca)
But now, tenancy and anti-poverty organizations are lobbying for more renters’ rights. That’s something Pomeroy sees as a positive shift.
He also says he believes many younger Canadians see renting as their future. It gives them the freedom to pursue experiences, move for jobs and not remain tethered to a property that they can’t afford.
Pomeroy recently asked his graduate students — all employed and in their 20s — if they thought they could buy a home in the next five years. Would you want to?
He says he was surprised to hear for the first time, none of them believed they could.
“Nobody thought they could, and only about half actually wanted to.”
The average monthly cost for rental properties across Canada in July was $1,934 — up 10.4 per cent over last year — making it harder still for renters to find affordable housing. (David Horemans/CBC)
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
