I spend much of my time reading reports on Real Estate and most articles and blog posts discuss Buyers, Sellers and the state of the market as it relates to mortgage rates. What I rarely see is information about how the rental market is doing in Durham Region. I thought it would be worthwhile to look and determine how the rental market is performing today.
Here are a couple of headlines that sensationalize the rental market:
“Rent control “loopholes” have let Ontario Rents soar.” (Toronto Star)
“Renters are paying the price of Canada’s housing crisis.” (Canadian Centre for Housing Rights)
“Ontario renters struggle as inflation soars.” (Capital Current)
When people read headlines like the ones above it is easy to believe that we are in an escalating rental crisis. Here in Durham Region, things are a bit different than they appear in the media.
If you look back over the past few years, we can see that rents have increased. I have compiled a list of 1- and 2-bedroom rentals over the past 30 days and compared the rental rates to the same period in 2023 and 3 years ago.
Rental Rates May 3/21 – June 3/21
Oshawa: 1 bedroom $1,256/mth 2 bedroom $1,771/mth
Clarington: 1 bedroom $1,613/mth 2 bedroom $2,150/mth
Whitby: 1 bedroom $1,300/mth 2 bedroom $1,875/Mth
Rental Rates May 3/23 – June 3/23
Oshawa: 1 bedroom $1,400/mth 2 bedroom $1,932/mth
Clarington: 1 bedroom $1,475/mth 2 bedroom $1,933/mth
Whitby: 1 bedroom $1,867/mth 2 bedroom $1,986/Mth
Rental Rates May 3/24 – June 3/24
Oshawa: 1 bedroom $1,609/mth 2 bedroom $2,155/mth
Clarington: 1 bedroom $1,825/mth 2 bedroom $1,700/mth
Whitby: 1 bedroom $1.700/mth 2 bedroom $2,300/Mth
Over the past 3 years Oshawa 1-bedroom apartments have increased by 28% and 2 bedrooms by 22%. Clarington has increased by 13% and 11% and Whitby rentals have jumped up by 44% and 23%. An explanation as to why Clarington has had massive increases in rental rates may be due to fewer homes for rent in Clarington. Oshawa seems to have most of the rental stock with Whitby offering fewer choices. With high demand and low supply prices are escalating. This is apparent in both Whitby and Clarington. If we look at Ajax, the increases have been 18% for 2-bedroom apartments over the past 3 years.
The legal amount for a rent increase has been around 2.5% per year and when you look at how the scarcity of rentals available have impacted the cost of renting, you see Oshawa rents on average $250/mth above the legal amount of increases. The higher rents are due to the fact that new properties are introduced to the pool of available rentals, with higher carrying costs and ultimately higher monthly payments for tenants.
It appears at the moment as if the rental rates are stabilizing, however with a shortage of units available, it would not be a surprise to see higher rents in the near future. The best way to bring the rental rates down would be if a large volume of rental units flooded the market, and with landlords competing for tenants, the rental rates would decline. Sales of homes and rentals are all governed by the law of supply and demand. With fewer units available than tenants, naturally the monthly rents will rise. What we need is another Real Estate boom and investors to get into the market.
If you are an investor considering purchasing a rental, I can be reached at lindsay@buyselllove.ca or 905-743-5555
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