Donna Velasco, 25, began apartment hunting in Hamilton early this year. Married this past fall, she and her husband are trying to find a place to call their own in the city’s Dundas community and living with Velasco’s parents in the meantime. Given the COVID-19 pandemic, Velasco says she expected rental prices to come down this spring — but that hasn’t been her experience. “Surprisingly, we haven't seen any price change at all,” she says.
Real-estate experts and a pair of recent market reports suggest that rents in Hamilton and other smaller Ontario cities aren’t declining as dramatically as they are in Toronto. And, by some measures, they are actually rising — even as the province’s economy struggles amid a public-health crisis. Crystal Chen, a data analyst at PadMapper, a website that aggregates online apartment listings, notes that, prior to the pandemic, people were already struggling to afford Toronto. “People are looking for neighbouring, cheaper cities to move to, and I think Hamilton is one of those cities,” she says. “Now, with the pandemic, I think that just amplifies this trend.” Chen says the same trends are playing out around expensive cities across North America.
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According to the May market report from PadMapper, authored by Chen, between March and April, the median asking rents in Toronto for available one-bedroom apartments fell 2.2 per cent, to $2,200; for two-bedroom units, rents declined 4.1 per cent, to $2,830. But, over the same period, rents for both dwelling types in Hamilton climbed about 3 per cent, putting one- and two-bedroom units at median prices of $1,380 and $1,640, respectively (Barrie, Kingston, Oshawa, St. Catharines, and Windsor all saw one-bedroom rents rise on a month-over-month basis, as well). PadMapper focuses on one- and two-bedroom units because they generally make up the bulk of local rentals.
That Hamilton’s rents appear to be holding while Toronto’s fall doesn’t surprise Arun Pathak, president of the Hamilton and District Apartment Association. With 34 years of experience managing apartments in Hamilton, Burlington, and Oakville, he says he’s seen it happen before. “Over the years, we've seen movement from Toronto outwards as Toronto rents get too high for certain people to afford them — they look elsewhere,” he explains. “Every time people have a financial issue, they're looking for somewhere cheaper. There's a tendency for somebody in Burlington to look in Hamilton — and that sort of supports Hamilton's rents compared to Toronto.”
A separate report from rentals.ca, another listing website, also shows some month-over-month rent growth in Hamilton and broader declines in Toronto. Hamilton landlords with one-bedroom apartments listed in April asked an average of $1,485 per month, 3.9 per cent more than the previous month (two-bedroom rents were down 2.3 per cent, averaging $1,629). Meanwhile, in Toronto, additional rentals.ca data show that the average asking price was $2,049 for a one-bedroom unit, down 3.4 per cent, and $2,509 for a two-bedroom unit, a 6.1 per cent reduction. Like data from PadMapper, the rentals.ca numbers indicate the rents that landlords are asking, not necessarily what existing tenants are paying. Experts note that a number of factors can skew such data. For example, a group of high-priced units left unrented could drive up averages in a city.
Hamilton’s recent rent hikes come on the heels of prolonged pre-pandemic increases. Rentals.ca reported that, on average, the city’s rents for apartments and condos were up 30 per cent in April from where they’d stood a year ago. “Overall, Hamilton is up fairly large,” Ben Myers, the author of the report, says of the year-over-year surge. “And, obviously, that was driven by the sheer unaffordability of the Greater Toronto Area and how quickly rents have gone up.”
Myers adds that asking rents don’t account for bonuses or special short-term discounts a landlord may choose to provide as incentive: “We're seeing landlords offering free months of rent, $500 off the first month's rent, or they'll make some upgrades to the suites that they weren't planning on to entice you to come in. So it's not always easy to get the real sense of what's happening.” Velasco says that she has seen similar incentives in her so-far-fruitless search. “I did see one online about 50 per cent off for the first six months; there was one apartment that we saw that was posted for $1,400, but when we came to see it in person, the landlord told us that they're dropping it by $100.”
Myers says another thing that may be driving listing prices down in Toronto more than in Hamilton is previously short-term rentals in the former’s downtown becoming available for longer-term tenants as tourism decreases. Sara Mayo, who’s researched rents and rental policy for the Social Planning and Research Council of Hamilton, agrees with Myers that previously short-term rentals might be responsible for the disparity between Hamilton and Toronto. “The problems with the housing market are not because people are moving here; it's because of the commodification of housing and housing becoming an investment vehicle,” Mayo says of Hamilton. “The market here was so unsustainable. The rental prices were going up 5 and more per cent a year … despite most units being under rent control, and that means the newer units were seeing even higher price increases.” In December 2019, Mayo and her colleagues reported that, from 2015 to 2018, actual rents for private units increased 21 per cent in Hamilton.
While rents appear stable in Hamilton, Myers and Pathak say that demand for apartments is waning during the pandemic. And if fewer immigrants come to cities, unemployment rises, and more universities move courses online, as Hamilton’s McMaster University has decided to do for the fall, the trend will continue, Pathak says: “The last couple of years, the market has basically favoured the property owners. So it will move from there. Whether it moves to be more balanced or further toward a sort of renter's market, we don't know right now.”
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