Canadian renters have a tough few years in store, according to a new forecast from the CMHC, as those boxed out of an unaffordable housing market compete for a limited supply of rental homes.
Canada Mortgage and Housing Corp.’s new housing outlook released Thursday warns that rental market conditions in Canada are “expected to further tighten,” raising rents in major markets such as Toronto, Vancouver and Montreal.
The existing rental supply is already low, CMHC pointed out in the report, and competition for these units is only getting hotter amid strong immigration levels in Canada.
Meanwhile, today’s renters are struggling to become homeowners in Canada’s housing market.
CMHC projects that while home prices are expected to finish 2023 at a lower mark than they did the year before as Canada’s housing correction hits its bottom, values are expected to rise through the following years.
Higher borrowing rates, meanwhile, will continue to make it difficult for Canadian renters to secure mortgages to break into the market.
“The challenge of affordability in homeownership will drive up demand for rental units,” the report read.
“Greater rental demand in the face of limited supply will lead to tighter conditions in already strained markets and lead to even higher rents.”
CMHC also expects the pace of new homebuilding will slow in 2023 and never quite return to the highs seen over the course of the pandemic over the course of the outlook, which forecasts out to 2025.
More to come.
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