Rents to soar even higher
According to Narcity, the average rent this year for a 3½ has reached $1620 while Alain Dubuc announced recently on La Presse that rents are about to explode, predicting a 30% increase before 2025.
I’m not seeing how people are affording this, but doesn’t an article like Dubuc’s tend to soften people up for the idea of ongoing massive rent hikes – making it sound inevitable and necessary?
mare 00:16 on 2023-05-03 Permalink
Average rent for a newly constructed 3 ½, not the average rent of the complete stock of existing 3 ½s.
There’s a bit of self-fulfilling prophecy in these ‘rents are exploding!’ stories. Even honest landlords will be tempted to jack up the rent between tenants because ‘everybody does it’ and they’d feel suckers if they don’t.
The cost-benefit ratio is also very skewed. Jacking up the rent of an apartment with $100 per month, not only increases their yearly rental income but also increases the resale value of their building with around $20,000. On the other hand, even if the new tenant successfully contests the rent increase with the TAL (and few do because they want a good relationship with their landlord) the possible penalty for the landlord is very small. A few hundred dollars, not in the neighbourhood of 20 grand.
denpanosekai 08:04 on 2023-05-03 Permalink
Verdun now in the top 3 right after Downtown and Westmount. Who could have guessed even 10 years ago!
Ian 09:31 on 2023-05-03 Permalink
Yeah this false dilemma logic is a bit misleading. The argument that if there isn’t new construction rental costs will soar by a similar percentage to how much new construction has dropped assumes it’s a zero sum closed system – there are also inflation, gas prices, supply chain, employment, mortgage rates, cost of living etc. etc. etc.
Like most things the cost of rentals isn’t a single-lever issue. The danger here is that making these fallacious claims influences political mood, making politicians more concerned about new housing starts in particular, which is of specific benefit to developers, the construction business, and realtors. Cui bono?
Blork 11:01 on 2023-05-03 Permalink
Oh, but the clicks!