Rising interest rates and strict mortgage qualification resulted
in fewer Canadians seeking homeownership than rental accommodations
last year, and 2019 will bring more of the same.
“It’s going to continue,” said Marcus &Millichap’s Vice
President and Broker of Record Mark Paterson.“People will continue
renting rather than dealing with residential mortgages.The rental
market right now can barely keep up with the vacancy rate in
Toronto, for example, being around 1%.”
Competition for rentals will be even fiercer this year in urban
centres and that will push rents upward, creating a spillover
effect into satellite markets.
“The rental market will see an increase of 8-10% because of
demand,” said Paterson.“Unfortunately for people trying to find
affordable housing, they’re looking elsewhere in secondary
markets.They’re priced out of city centres, and that means the
talent pool for jobs will end up in secondary markets.”
The Marcus &Millichap’s 2019 Multifamily Investment Forecast
Report notes that apartment projects have become more financially
viable, as evidenced by 60,000 units in the pipeline
countrywide.However, that’s little relief given how few vacancies
there are.
“The number of occupied units grew by 50,000 last year,
outpacing supply growth nationally just as 37,000 new apartments
came online,” read the report.“The national vacancy rate declined
to 2.4%, the lowest reading since 2002.A shortage of construction
workers,