Mississauga Outpacing Toronto in Rental Price Increase
According to Rentals.ca’s Dec. 2019 report, Mississauga rents are on the rise – and fast.
In fact, data trends have shown that Mississauga rents increased almost $200 from 2018 to 2019. That represented a growth of 10.2 per cent – a rate comparable to Toronto’s surging rent prices.
In part, as the report explains, the rapid rate of rent increases in Mississauga might be due to Torontonians looking for bigger spaces outside of the downtown core. By 2019, average rent sat at $2,504 per month. However, the forecast for cost for 2020 is that average rents will surpass $2,600 – a growth of 8 per cent.
That number is higher than any other Canadian city, including Toronto, where rents are expected to grow at a seven per cent increase. Other cities include Montreal (5 per cent), Ottawa, (4 per cent) and Vancouver (3 per cent).
As Mississauga continues its drive to urbanization, the city, along with Brampton, is one of the two “sizzling” housing markets in the GTA, according to the latest data released by the Toronto Real Estate Board (TREB).
Both Mississauga and Brampton suffer from a severe lack of housing inventory, which also impacts the rental market.
In fact, the rental vacancy rate in Mississauga sits around 0.8 per cent. That’s far below what’s considered the healthy vacancy threshold of around three per cent.
At least 50 condos are expected to be built in Mississauga alone over the next 10 years and work on the highly anticipated Exhange District is underway. Plus, several ambitious waterfront developments featuring mixed-use housing are under way.
Development along the Hurontario LRT is also expected to increase the housing/rental stock.
On the flip side, Western cities such as Calgary and Edmonton are still emerging from the recession and rental prices could actually drop by a single percent, according to the report.
Taken as a Canadian average, however, the overall cost of rent is predicted to increase by 3 per cent in 2020.
According to Rentals.ca listings data, the average rent for Canadian properties in November of 2019 was $1,918 per month, a decrease of 1.1 per cent monthly, but an increase of 9.4 per cent annually. The median rental rate was $1,850 per month in November, up 15.6 per cent from a year earlier ($1,600).
But even that predicted 3 per cent rental increase threatens to be a stretch for most Canadians, considering how much of a struggle it currently is for working people to pay for shelter – especially those earning minimum wage.
For Toronto, rental rates jumped by 8.6 per cent between 2018 and 2019. In 2018, the average rental rate was $2,385 for all property types listed on Rentals.ca, however, that rate increased to $2,591 in 2019, an increase of 8.6%. Overall in 2019, the average rent in Toronto was $2,504 per month.
Now, Torontonians might not be surprised that the rental increase will rise, but it doesn’t make it any easier to cope with. While salaries are expected to increase incrementally in 2020, the rate won’t coincide with the dramatic rise in housing expenses.
For Toronto, Rentals.ca predicts that the average rent in 2020 to surpass $2,800 – in a rental increase of 7 per cent. This forecast is a moderation from the 11% annual growth forecasted by Rentals.ca and Bullpen last year, which was a little too bullish, as condo rental rates have moderated more than expected, despite the more pronounced increase in rental rates for purpose-built apartments and single-family homes.
Given the strong pre-construction condominium apartment sales from 2016, the number of condo apartment completions is expected to rise rapidly in 2020. However, this additional housing won’t likely put much of a dent in the housing crisis, as elevated population growth, and a recovering resale housing market will continue to price-out first-time buyers and keep the vacancy rates minimal.