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Vancouver boasts priciest rent in Canada – is anyone surprised?

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With the average cost of a Vancouver home sitting at $1,055,495 in May, paying $1,700 rent for a one bedroom doesn’t seem like such a bad deal after all. The rental market, which according to apartment search platform PadMapper is the country’s most expensive, actually saw a softening between April and May falling 2.3 per cent. The median two-bedroom in the city – which can be yours for the extremely (un)reasonable $2,780 – slipped a meager 0.7 per cent.

“I was particularly surprised by the dominance of Vancouver. Of course many would expect the city to be expensive, but to have that sort of distance over the rest is notable,” Devin O’Brien, head of marketing for the company told Yahoo Canada Finance. “The median of $1,700 for a one bedroom in Vancouver ranks first in Canada, and 11th overall for major cities in North America.”

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But the slight softening is a contrast to the ownership market where Vancouver prices climbed 5.2 per cent between April and May, according to the latest stats from the Canadian Real Estate Association. Last week, the Bank of Canada issued its sternest warning yet on Canada’s real estate market saying that imbalances in the regional housing markets are higher than they were six months ago and could pose a risk.

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“Nevertheless, it was the view of Governing Council that this conclusion merited a caveat, which is that the pace of house price increases in Toronto, and especially Vancouver, is unlikely to be sustained, given underlying fundamentals,” says the report.

As the Bank of Canada pointed out, Toronto’s own real estate market is seeing rampant price growth so it’s no surprise the city follows Vancouver as the country’s second most expensive rental market. The going rate of a one bedroom climbed 1.5 per cent between April and May to $1,320 while the rental price of a two bedroom fell 1.2 per cent during that same period to $1,650.

The third most expensive city was Victoria, where island living in a one bedroom will set you back $1,100 a month and $1,400 for a two bedroom. Prices rose 1.9 per cent month over month and 2.9 per cent for one bedroom and two bedrooms respectively. Housing prices in the city are expected to rise 6.2 per cent in 2017 as spillover from overheated markets on the mainland drive British Columbians west, according to predictions by the B.C. Real Estate Association.

Calgary isn’t too far behind Victoria, with rent sitting at $1,070 for a one bedroom, a 2.7 per cent decrease from the previous month. Two bedroom apartments also saw a dip in rent, down 3.7 per cent to $1,300 in May. Calgary vacancy rates are expected to rise, while rent drops as a result of the province’s recession, according to the Canada Mortgage and Housing Corp.

“A rise in the purpose-built rental vacancy rate along will additional options in the secondary rental market will put downward pressure on rents this year,” said the report. “Although incentives will continue to be offered, some landlords will also lower rents to attract tenants.”

In fifth place is Ottawa, which also saw a slight dip in rent prices month over month with landlords asking for $1,010 for a one bedroom, down 1.9 per cent, and $1,300 for a two bedroom, a 1.5 per cent slip in rent. The city was recently named the country’s best place to live by MoneySense, on account of its strong economy and high income – the median household income is $91,510 – plus aspects like transit and pedestrian-friendliness.

But perhaps what is most telling about PadMapper’s findings is the discrepancy in housing prices between Canada’s most expensive city to rent in, Vancouver, and the fifth most expensive, Ottawa, where homeownership, at $509,460 for the average home, costs nearly half as much as Vancouver.

See PadMappers complete list here.