Rental analysts are predicting rent prices in Greater Victoria will rise between five to 10 per cent in 2022, while real estate analysts say home purchases have drastically decreased indicating the market may be “normalizing.”
Rentals.ca, in partnership with 24 experts across Canada including Canada Mortgage and Housing Corporation economists and analysts, housing data analysts, investors, and rental market specialists, released a report predicting that in most provinces and cities in Canada rent will continue to climb this year.
The forecast calls for Toronto average monthly rents to increase 11 per cent by the end of the year; Mississauga monthly rents will be up 7 per cent by December; Vancouver average rents will increase 6 per cent; Montreal will post an annual increase of 5 per cent and Calgary rents will go up 4 per cent annually, according to Ben Myers, president of Bullpen Research & Consulting.
Leo Spalteholz, a real estate analyst for House Hunt Victoria says he predicts rents will rise between five to 10 per cent, due to the vacancy rate being back down to one per cent.
“Though construction of purpose-built rental has increased substantially in the last five years…This comes after decades of neglect,” Spalteholz says in the report. “2021 marked the worst deterioration in housing affordability in Victoria’s history.”
CMHC statistics show Victoria had 26,144 purpose-built rental homes in 1991, and 28,206 in 2021, an increase of only 2,723 units while the population grew by about 116,000.
Spalteholz says the high cost of homes due to investor interest in the market means fewer people are able to buy a home, leading to increased rental demand.
Meanwhile, the British Columbia Real Estate Association (BCREA) reports that home sales in Greater Victoria for April 2022 have decreased by 25.7 per cent compared to the same month in 2021.
The average price, however, increased by 23.8 per cent.
In Victoria, the average price for a home was $1,093,131 in April 2022, compared to $883,139 in April 2021, and a total of 785 housing units sold in April 2022.
Vancouver Island as a whole followed a similar pattern as Victoria, with an increase in price but a decrease in total sales.
The average price for a home in April 2022 increased 21.7 per cent compared to April 2021 to $813,382 from $668,493.
The number of units sold decreased 19.9 per cent with 897 units sold in April 2022.
In B.C., home sales were down 34.9 per cent from the same month in 2021.
There were a total of 8,939 residential unit sales this year, with an average price of $1.065 million, a 12.9 per cent increase from $943,765 recorded in April 2021.
The total dollar value of the home sales was $9.5 billion, a 26.5 per cent decline from the same time last year.
“Canadian mortgages have sharply increased, surpassing 4 per cent for the first time in a decade,” said BCREA Chief Economist Brendon Ogmundson in a news release. “With interest rates rising, demand across BC is now on a path to normalizing. However, given existing levels of supply, markets conditions remain tight.”