Many new P.E.I. apartments are higher end with higher rents
'What's being built is far higher than what many people can afford'
A housing analyst with the Canada Mortgage and Housing Corporation says the trend in P.E.I. apartment buildings right now is higher-end design with higher rents.
"Rents on average would range from a minimum of $1,200 a month to a maximum of $2,000 a month," said senior housing analyst Chris Janes.
Janes said buildings typically are more luxurious and appealing to retirees who are downsizing and the trend is in response to demand from the senior demographic.
Demand 'quite strong'
Janes says with P.E.I.'s large senior population and low vacancy rate, demand is "quite strong."
"They're realizing that it's very attractive to sell their home, invest the capital, and rent," he said.
He says apartment units are now equipped with in-suite laundry and stainless steel appliances — more amenities than older style apartments.
It's a different product than lower-end older style buildings, he said.
"These people are looking for ease of living."
Alfred Affleck has been building apartments for about 30 years and says the higher-end apartments appeal to older and younger people. Affleck said he sees younger couples looking for bigger kitchens and bedrooms as well.
"The units have more amenities in them," he said. "There's huge demand for it."
CMHC says costs for developers such as land, labour and materials have gone up, which also contributes to the higher rents, something Affleck agrees with.
"Every year they're going up quite a bit," he said. "Overall the building costs is tremendously high."
Affleck hopes to build more in the spring and says rents will likely have to be higher than the building he just finished.
Leo Cheverie, a member of the group The Fight For Affordable Housing, said that newer buildings are not affordable to many people. He hopes to see more housing co-ops created and more government funded affordable housing projects and said rent increases aren't in line with what many people are making for income.
"What's being built is far higher than what many people can afford," he said.
Cheverie said he hopes a long-term plan will be developed and more affordable buildings will be built as well.
"We should be developing not just high-end housing but we should be looking at housing that meets the needs of people with various levels of income."
More supply will help
Janes said although the higher-end units may be out of reach for some people they could help free up other more affordable units.
"Anybody ... currently in older rental stock will leave and maybe move into the new units," he said.
Janes expects to see more affordable housing projects in the future as well, pointing out that CMHC does have an affordability focus and a national housing strategy available to help with funding more projects.
"Hopefully we can work with some of the builders there locally and put some affordable units on the ground."