The Canadian Real Estate Market is one of the hottest real estate markets in the world and for great reasons. A safe living environment, great climate, a safe haven for money and on the world scale, we still have well priced real estate. Each year, prices are increasing as demand increases and many millennials are choosing to rent instead of own due to the increasing housing prices and the changing mortgage rates and laws. Currently, borrowers with a down payment of less than 20% must purchase mortgage insurance and beginning January 2018, those borrowers will also have to undergo a “stress test” which essentially ensures the borrowers will be able to make their mortgage payments should the rates increase. The borrowers will have to be qualified at a mortgage rate 2% higher than the current posted rate.
In a news article published a few days ago, CBC News reports that the average rent for a 2 bedroom apartment in Canada is up 2.7% compared to the same time last year. Currently, the average price to rent a 2 bedroom apartment in Canada is $989. With these changing mortgage laws making it more difficult to purchase properties, more people are turning to renting. However, we can see that the rental rates are increasing drastically which begs the question – is it better to rent or to buy?
Average Rental Costs
The average rents across Canada for a typical 2 bedroom apartment range from the lowest at $594 in Trois-Rivieres, QC to the most expensive at $1,552 in Vancouver, B.C. The highest cost increase was in Kelowna, B.C. which increased by 8.6% compared to the same time last year. Victoria and Vancouver also increased largely, by 8.1% and 6.2% respectively.
The article explains that rents in B.C. and Ontario have increased due to declining vacancy rates which allows landlords to be choosier about tenants and raising their rent prices. We see evidence of this in our own local market with many people complaining of being unable to find a rental property that meets all of their needs and is within their budget.
Personally, I’m pro buying… if you have the means to afford it. Prices are on the rise, and that builds equity, which eventually gives you more choices. However, it’s all wrapped up in the affordability equation. Curious about the benefits of renting vs. buying? Give me a call and we’ll discuss it over coffee.