Montreal, January 26, 2023 --- The Association des Propriétaires du Québec (APQ) has recently read CMHC’s 2022 Rental Market Report. And unsurprisingly, the vacancy rate has decreased in several regions, including the Montreal CMA, where it fell from 3 to 2%.
Many rental housings in need of major work would be available for rent if renovation subsidies or tax credits were quickly made available.
In order to stimulate the renovation and construction of rental buildings, a reform of the method of setting the rent must be implemented.
How can one otherwise explain that with such a low vacancy rate there are not more construction projects right now in Québec?
Talking with an investor makes you quickly realize that the different rules imposed on the owner of a rental property affect the perception and profitability of a residential rental property significantly.
With a return on investment of 26 years in 2023, investors are moving away from building construction to more profitable investments.
The rate for major work has indeed increased from 2% to 3.8%, but the fact remains that it will take 26 years for a return on investment: $3.17 for every $1000.00 of work done.
This situation needs to be changed. There must be a combination of relaxations in the rules for rental properties, including the determination of the rent.
Tenant assistance measures and subsidies to facilitate the construction and renovation of housing are certainly among the elements to be considered, in addition to the relaxation of the rules for setting the rents.
We must also stop seeing the owner of a rental property as the one who must assume the role of the Government in terms of the ability of poorer tenants to pay.
This year, the report differentiates rent variations between tenants who stay in their dwellings and those who move into a new apartment.
But this analysis does not take inflation into account:
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2021-2022
The CPI (Consumer Price Index) rose by +6.9% in October 2022, a 12-month change, according to Statistics Canada.
Rent in Montreal +5.4% over the same period according to the latest report.
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2020-2021
The CPI rose +4.7% in October 2021, a 12-month change, according to Statistics Canada.
Rent in Montreal + 3.9% over the same period according to the latest report.
The conclusion of the price of a new lease should be freely negotiated and not be subject to a rule setting the rents.
Finally, the rental report still points out, year after year, that rent prices in Montreal are still low; Montreal ($1022) continued to post one of the lowest rents in Canada.
And elsewhere in Canada: Ottawa $1625, Toronto $1765, Calgary $1466, Vancouver $2002.