Rental housing construction in Canada has picked up significantly and is expected to keep growing this year, according to a new RBC report.RBC economist Rachel Battaglia said rental housing starts reached their highest levels in decades in 2022 and 2023, with more than 80,000 new units started each year.
“We’re also seeing a shift to rental housing in general in Canada. It’s been happening since 2011, with more baby boomers entering the rental market and cost pressures keeping home ownership out of reach for a growing number of Canadians,” said Battaglia. A severe imbalance in rental housing supply and demand has caused rent prices to soar, the report said, with annual rent growth in 2023 outpacing both inflation and wage growth. The rate of home ownership has fallen since it peaked in 2011 as homes have skyrocketed in value.
“But there is this backlog that we have to account for. Because over the last few years, new rental demand well surpassed additions to the purpose-built rental stock, which means that that gap has been growing.” Governments at all levels have responded to the imbalance with rule changes and incentives to promote high density and rental housing construction, especially over the past five to seven years, Battaglia said.
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More rental housing development needed despite recent rise: RBC economistRental housing construction in Canada has picked up significantly and is expected to keep growing this year, according to a new RBC report.
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