Rental frenzy in St. John's leading to housing shortage and rising prices, tenants say
Low supply leaving tenants, property managers frustrated
Georgianne Penney was desperate.
The 27-year-old from Mount Pearl had been looking for an apartment for months, scouring ads for places across metro St. John's. She'd called up property managers and cast a wide net at her friends.
But every time someone responded to her, they told her the same thing.
Sorry, they'd say. We've had a lot of responses, and went with someone else.
"I expected it to be like it used to be, where you'd see a bunch of places listed.… It would take maybe a month, two tops, and you'd have a place, guaranteed," she said.
"It absolutely was not that."
Penney, left on the brink of homelessness and bouncing between couches, posted her own ad online, pleading for help. The ad eventually worked, landing Penney a pet-friendly basement unit in Paradise — nearly a full year after she started her search.
"I lucked into this apartment by the skin of my teeth," Penney said gravely.
The rental market in Newfoundland and Labrador's capital city has been heating up since 2020, according to two property management companies reached by CBC News.
For renters like Penney, it's reached a boiling point — and landlords, too, have noticed.
Hilda Senior, a landlord for two decades who owns six pet-friendly rental units in metro St. John's, says some prospective tenants offered to pay her more than her asking price in recent months.
"Usually it's, 'Do you think you could do better? Can you lower the rent?'" Senior said. "I guess that there's just nothing out there."
When Senior advertised a main-floor apartment in October 2020, she found herself inundated by responses: more than 50 people contacted her, clamouring to view the unit.
"There were people actually lined up on the street, waiting to come in," she said. "I've never seen that before. Never."
The rental market in St. John's is historically tepid, at least compared with other cities across Canada, which have battled low vacancy rates and spiking rents for the better part of the last decade.
But the past two years have brought swift changes to the region, according to those contacted by CBC News.
The Canada Mortgage and Housing Corporation, which tracks housing stock and prices across the country, hasn't yet released its rental market data for 2021, leaving only anecdotes to describe what apartment-hunters are deeming a housing shortage.
But property management companies, with their fingers on the pulse of the St. John's housing supply, say they've seen dramatic shifts in the rental landscape over the last two years.
Holly Halfyard, a business developer with Krown Property Management, describes a domino effect.
As the real estate market peaked in 2020, she said, owners started to sell off their assets, cleaving those rental properties from the pool of available units.
"Some of our own clients opted to sell their homes, so lots of tenants had to vacate," Halfyard said. She started sending off three-month notices at a rapid clip.
At the same time, a main-floor unit that not long ago rented for $1,400 a month is now going for $1,700, she said.
"It's putting tenants in a tough spot.… With demand being so high, it means rental rates are increasing," she said. "It's pretty upsetting. I don't know how people afford it."
Peter Curran, who owns Metro Property Management, echoes her concern.
"Rates have gone up," he said, ticking off a list of causes. Transplant Albertans and Ontarians have retired and moved back home. Former landlords have taken advantage of booming real estate and sold their homes to people who aren't renting them out.
And, in the COVID-19 era, remote workers from other provinces have flooded the city, looking for cheaper rent and seaside views. One client, Curran says, sold her condo in Montreal, then bought two houses in Newfoundland; other come from aways have rented units from him sight unseen.
"Twelve years ago it was an oil-driven market, very similar," he explains. "We'd get multiple offers on properties. We haven't seen that in years. But this year we did see that."
'Everyone's raising the rent'
Penney, who holds two full-time jobs — one as a manager of a fast-food restaurant, the other as a tattoo artist — says she stretched her budget to the limit to find an apartment, setting aside $1,500 a month for rent. In desperation, at one point, she even considered rehoming her cats.
"I actually had a landlord tell me that someone else offered them $300 above the rent to have the place, and someone else offered more. He basically had a bidding war going on," she said.
"Everyone's just raising the rent like crazy, and it doesn't seem like there's really anything in force to stop them from doing that."
For now, Penney says, she'll remain in Paradise for as long as she can.
"I don't even want to try to face the rental market again, knowing what it is," she said. "If it's even going to get better any time soon, I have no idea."