Kitchener-Waterloo

Rental market will remain tight in K-W, predicts CMHC

Finding a place to rent in the tri-cities is tough and will likely stay that way over the next two years. That prediction is among those outlined in the Canadian Mortgage and Housing Corporation's latest market outlook.

Demand for rentals driven by population growth, agency says

Finding a place to rent in the tri-cities is tough — and likely to stay that way over the next two years. That prediction is among those outlined in the Canadian Mortgage and Housing Corporation's latest market outlook. (CBC)

Finding a place to rent in the tri-cities is tough and will likely stay that way in the coming years, according to the Canadian Mortgage and Housing Corporation's latest market outlook.

The federal housing agency is predicting a tight rental market primarily due to a high level of population growth in the region.

In fact, population growth is so strong that — despite the number of purpose-built rentals increasing by 20 per cent in the last four years — the vacancy rate is expected to decrease further in 2020 and 2021.

 "There's just a lot of people moving in," said Jennifer Tsao, a senior analyst with CMHC. She noted that from  2017 to 2018, Kitchener-Cambridge-Waterloo was the second fastest-growing urban centre in Ontario.

In particular, rising enrolment from international students and the growing numbers of seniors in the region have been identified as drivers of rental demand in the CMHC report.  

The type of rentals that are available also makes a difference, Tsao said.

Many of the new purpose-built rentals have been in the luxury market, which she said is "not what everyone's looking for."

'Increased pressure' on affordable housing

Ryan Pettipiere, the region's director of housing services, said a tight rental market is also likely to drive further demand for affordable housing.

"We're seeing the need for affordable housing really hit across income demographics, and what that does is put increased pressure on community housing that is subsidized and more affordable," Pettipiere said.

Right now, he said wait times for affordable units can range from one year up to seven or eight years.

 With affordability a hot topic in recent provincial and federal elections, Pettipiere said he hopes governments will soon turn talk into action.

"We're hoping that that message has been received and we'll see that translate into some specific programs to increase the supply across the housing continuum in the future," he said.

The vacancy rate in the tri-cities is currently sitting at 2.7 per cent, according to CMHC. It is expected to decline to 2.6 per cent in 2020 and 2.5 per cent in 2021.  (David Zalubowski/Associated Press)

The vacancy rate in the Kitchener-Cambridge-Waterloo core market area is currently sitting at 2.7 per cent, according to CMHC. It is expected to decline to 2.6 per cent in 2020 and 2.5 per cent in 2021. 

Meanwhile, the average cost of a two-bedroom apartment is expected to rise from $1,240 to $1,300 in the same time period.

As for those looking to buy, the CMHC says home sales are also forecast to increase in the next two years, driven by population growth and low unemployment.

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