With the housing crisis intensifying, are we looking for other scenarios? In a Leger survey conducted for RE/MAX Canada, 48% of Canadian respondents say they are considering purchasing a residential property using a non-traditional approach. More specifically, 22% would consider renting with an option to buy, 21% would consider co-ownership with a family member who is not the spouse, while 17% would consider purchasing by being the main occupant and renting the remaining part. .
In his analysis of Rental market report of the Canada Mortgage and Housing Corporation (CMHC), Mathieu Laberge, first vice-president of economics and housing prospects, goes further and indicates that in the short or medium term, other options deserve to be studied. At least, it suggests that non-traditional modes of housing borrowing from one form or another of cohabitation be the subject of more in-depth research. Especially since they encourage us to rethink our way of seeing housing.
Elsewhere on the planet, “in many other large markets, different households, not just students, share housing to make ends meet. In other cases, the most affordable accommodations have common areas, such as a kitchen, living room or bathrooms. » We could add to this the extension of the amortization period of mortgage loans as we see elsewhere, capped here at 30 years.
Have we reached this point?
At the start of the year and with the moving season approaching, the picture is not very rosy, with a housing crisis coupled with an affordability crisis. In Canada, the vacancy rate, at 1.5%, has never been lower in 20 years. As for rents, last year they experienced a feverish surge of 8%, an increase far higher than the historical average of 2.8%. “Many people in Canada are unable to access market housing,” emphasizes Mathieu Laberge.
Worse, in large centers like Vancouver, Ottawa and Toronto, the rental housing stock likely to be affordable for the 20% of people with the lowest incomes is practically non-existent. The CMHC specialist adds that, overall, more than one in four renters in Canada occupy housing that is unaffordable given their financial means. “These people must therefore find another housing solution or sacrifice other essential needs to make ends meet. »
And it’s not just because of a construction deficiency. In 2021 and 2022, housing starts reached historic levels. Certainly, they decreased the following year, but remained well above the average of the last 30 years. “There has also been a structural change over the last ten years. Apartments have steadily increased as a percentage of total housing starts. The proportion of housing intended for rental among all units started increased from 14% in 2013 to 36% in 2023,” writes Mathieu Laberge.
However, more construction does not mean more accessibility to housing. “We must recognize a very important fact: new rental housing is not necessarily affordable when it is ready for occupancy. It could take several years for the additional supply to increase affordability. » In a report intended for public decision-makers, the Independent Working Group for Housing and Climate, made up of 15 experts, including former Bank of Canada Governor Mark Carney, estimates that a restoration of accessibility in Canada requires 5.8 million new affordable homes by 2030.
Closer to us, in the greater Montreal region, the Rental market report (January 2024) from CMHC indicates that the vacancy rate has further decreased in 2023, to 1.5% compared to 2% in 2022 and 3% in 2021, to display one of the lowest levels in the last 20 years . Despite the high number of housing starts in 2021 and 2022, “housing supply is struggling to keep up with the strong growth in demand supported by record migration, employment and high property costs”. Net migration has more than doubled in Quebec in 2023 with the arrival of a record number of non-permanent residents, she highlights.
This scarcity of available housing in a context of high inflation resulted in a record increase of 7.9% in the average rent (for a two-bedroom apartment). The CMHC is talking about the largest increase in rents in Montreal for at least 30 years, which must be linked to an increase of 4.5% in the average salary in the region.
And we are talking, here, about an average. It is common for landlords to take advantage of the end of a lease to increase the rent to a level exceeding the increases recommended by the court. For two-bedroom apartments, the variation in average rent for units that welcomed new tenants was 18.9% (at $1,310), compared to 5.7% (at $1,052) without a turnover rate, i.e. a difference of 25% of the average rent.
The CMHC adds in its report that the vacancy rate is particularly low for housing with the lowest rents. “For example, only about 1% of homes renting for less than $1,075 were vacant in October 2023.” And that the scarcity of available homes and their higher-than-average rent pose a challenge for new households and those who wish to or have to move. “Less than 10% of housing units have changed tenants in 2023 in the Montreal market. » By comparison, the tenant turnover rate was around 17% from 2016 to 2019, before the pandemic.