The rate at which Canadian rental prices are increasing should slow in the coming years as the governmentB次元官网网址檚 plan to cut back immigration numbers takes hold, a new report from from a prominent financial service says.
B次元官网网址淥ur outlook is for a slowdown in the pace of rent inflation over the next few years, in line with a rising unemployment rate and weaker population growth,B次元官网网址� Desjardins predicted.
Rents have been rising fast and rent inflation is B次元官网网址渕uch higherB次元官网网址� than increases in the price of owned homes, it said. Inflation of rented accommodation was 8.3 per cent in the third quarter of this year, B次元官网网址渢he fastest pace since the early 1980s.B次元官网网址�
Last month, the federal government announced plans to slash CanadaB次元官网网址檚 immigration targets by 20 per cent as the government faced increased pressure to address the cost and availability of housing.
Ottawa is also aiming to reduce the proportion of temporary residents, which includes temporary foreign workers and international students.
The Desjardins report noted that non-permanent residents B次元官网网址渁re more likely to rent than purchase a home due to the temporary or uncertain nature of their stay in Canada.B次元官网网址� Many permanent residents also rent once they arrive in Canada, it noted.
B次元官网网址淟owering the number of newcomers should halt or possibly even reverse CanadaB次元官网网址檚 population growth, slowing demand for rental accommodation,B次元官网网址� the report said.
But while Desjardins expects rent inflation to slow, it said there is uncertainty around how the federal government will implement its new immigration policies.
B次元官网网址淚f the population slows faster than anticipated, the demand for rental accommodation will slow and price pressures will ease,B次元官网网址� it said.
On the other hand, higher-than-anticipated population growth that are more in line with the Bank of CanadaB次元官网网址檚 recent outlook wouldl put more sustained pressure on rent prices, the report said.
The effects will also vary by region, the report says. Rent inflation in provinces like British Columbia and Ontario will increase more slowly. And while rent inflation is expected to come down in all major cities, it will B次元官网网址渆ase moreB次元官网网址� in Calgary and Edmonton, Desjardins said.
B次元官网网址淎lberta and Saskatchewan should see rents slow the fastest given the highly cyclical nature of the economy and rental market in those provinces. In contrast, still-elevated rent inflation is expected in Quebec,B次元官网网址� it predicted.
Desjardins noted that across the country, the number of households that rent has B次元官网网址渞isen dramatically,B次元官网网址� meaning B次元官网网址渞apidly rising rents impact a large and growing share of households across the country.B次元官网网址�
It also warned any improvements may be temporary, with B次元官网网址渓onger-term solutions requiring substantial increases in housing supply and policy efforts to address affordability across both rental and ownership sectors.B次元官网网址�
