The rent on some Hamilton apartments has increased markedly over past year, according to a report by the Canada Mortgage and Housing Corporation, and the prices are expected to continue to rise.
The CMHC released its annual fall market report, which showed rents for existing two bedroom apartments in Hamilton were up 3.1 per cent compared to the previous year, well above Canada's overall inflation rate.
This does not include new units, however, and the increase in average rent for all units was relatively small when the rents for newly completed apartments were taken into account. Two bedroom apartments, including new builds, increased in average rental cost from $884 a month to $886 from 2011 to 2012.
The rental vacancy rate also stayed fairly static, increasing from 3.4 per cent in 2011 to 3.5 per cent.
According to Abdul Kargbo, CMHC's senior market analyst for Hamilton, the calm market conditions are due to a balance in supply and demand. A great deal of supply usually results in a higher vacancy rate and lower rental rates, while a high level of demand means lower vanacy rate and higher rent.
“On the demand side, for the most part, we’re beginning to see the housing market slowing significantly,” Kargbo said, adding this means renters are spending longer in their units rather than buying and moving into their first home.
“On the supply side, the number of completed rental units has increased.”
In Hamilton, this means the supply and demand factors are more or less balanced at the moment. But Kargbo said he expects this balance to shift in the coming months.
“Next year, we expect the slowdown in the housing market will continue, and we will continue to see a slowdown in rental movement,” he said. “We expect the demand will exceed supply next year.”
Hamilton residents can expect rents to go up again based on this shift, according to Kargbo, by at least 2 per cent.