When Melinda Johnson’s landlord sold their four-bedroom rental home in Belleville, Ont., at the beginning of the pandemic, she was expecting her family’s rent to rise in a new home. But they weren’t prepared for it to more than double.
Rent at Ms. Johnson’s old home, where they had lived for six years, cost $850 a month. The best price they could find for a five-bedroom house for her husband and four children in October, 2020, was in nearby Trenton, Ont., at $2,080 a month (which rises to $2,150 in the new year).
“Before, we actually had extra money because our baby bonus was at around the $2,500 mark,” said Ms. Johnson, who stays at home to take care of her children, one of whom has a disability.
She said her child benefit now goes almost entirely toward rent, and they have no hope of putting any money in savings.
“All my husband’s pay is strictly for bills and groceries, so we have nothing extra, and it is extremely difficult.”
It’s a situation that residents of many small and medium-sized Canadian communities are finding themselves in, as the pandemic exacerbates upward pressure in rental markets across the country.
While rents in larger cities such as Toronto and Vancouver stumbled earlier in the pandemic owing to factors like waning immigration numbers, prices are beginning to return to and surpass prepandemic levels. Many smaller communities, however, saw a near constant increase in rent through the pandemic because of an influx of newcomers and the rise of remote work.
Companies that track rental data and personal finance advisers say more Canadians from larger cities are looking to move to smaller communities because of a newfound appreciation for the extra space, and many of those moving are able to pay higher rent because of their ability to work remotely. Some communities such as St. Catharines, Ont., were already feeling pressure before the pandemic, as people who work in big cities look at longer commutes as they’re priced out of major cities.
In data compiled by Rentals.ca, the average rent for properties (all types) posted on their platform in Kitchener, Ont., jumped to $1,881 in the fourth quarter of 2021, compared with $1,271 in the first quarter of 2019. In Abbotsford, B.C., the average posting price grew to $1,848 in 2021 compared with $1,211 in 2019.
Rents also increased in Eastern Canada, with the average ad in Halifax rising from $1,326 to $1,791 between 2019 and 2021.
Paul Danison, content director with Rentals.ca, said some desirable cities such as Kingston and Victoria faced a double whammy of both city folk and returning university students clamouring for a limited supply of housing.
He said the strong demand in rental markets correlated with rising real estate prices, since people need more time as renters to save up for a down payment.
Andrew Dobson, a financial planner with Objective Financial Partners, said long-time residents of smaller communities have limited options when it comes to being able to afford living in their community.
“You can’t really budget for a doubling of rent. You can’t just deal with the problem by cutting a latte a day or something – it doesn’t work,” said Mr. Dobson, who is based in London, Ont.
“It comes down to making a major life change … if your rent is going from $1,200 to $2,000, how do you make up $800 when you might be living paycheque to paycheque as it is?”
Mr. Dobson said the only way people can make ends meet is by making a major career change, moving to cheaper parts of the country, such as the Prairie provinces or Northern Ontario, or getting creative with sharing a home with other people – none of which are necessarily easy options.
Mr. Dobson said he recently moved to London after life on Vancouver Island became too expensive. Now with rent skyrocketing where he lives now, he says he’d consider moving again.
While people like Ms. Johnson in Trenton have thought about moving to the Prairies, she said it would be hard to leave her family and friends, and to uproot her kids from their schools.
Even though she has a home now, she says she lives with a constant fear that her current landlord will cash in on a booming real estate market, and sell their home. That would leave her back at square one in an increasingly competitive and pricey renting market.
“It’s a source of anxiety,” said Ms. Johnson, who said many landlords told her they were only looking to rent for a year while their property increases in value.
“One of my first questions to a landlord is: Is this going to be long term? If they even have an idea of selling in the future, I’m not interested.”
Are you a young Canadian with money on your mind? To set yourself up for success and steer clear of costly mistakes, listen to our award-winning Stress Test podcast.