Key Factors Contributing to Rental Growth Across Canada

Published On: September 30, 2024

Categories: Industry Research, Viewpoint Research & Guides

Until now, analyses of Canada’s housing crisis haven’t focused sufficiently on the in-depth, local insights necessary to effectively drive policy changes addressing home affordability. In this AI-driven report, find out where and how rents are expected to increase in key regions across Canada and explore the factors driving them. These insights were made possible by a partnership between the John Molson School of Business at Concordia University and Equiton.

Included in this research:

Analysis of market forces driving record increases in rent prices and occupancy

AI-backed rental projections in major cities including Toronto, Vancouver, Montreal, and Calgary

Insights for policymakers, investors, and innovators working to address Canada’s housing crisis

Highlights from AI-Driven Insights into Key Factors Contributing to Rental Growth Across Canada:

Rapid rental growth: Rental projections created using a neural network model indicate that rents will continue to grow rapidly. For instance, in Toronto, rents are projected to grow by 26% by 2027 and by another 37% by 2032.

Atypical market: The traditional relationship between certain market forces has eroded due to extreme demand pressures. This report indicates a positive correlation between increases in housing supply and market rents and that rents will only start to decrease relative to an increase in supply when annual completions enter the 11% to 12% range.

Population growth: Some relationships, like that between population growth and rent prices, remain a key part of the story. The report finds that rental supply must be increased by six to 10 times to meet demand increases resulting from elevated immigration.

Ultra-low vacancy rate: With vacancy rates approaching 1%, there are few economically significant factors that can drive them down further.

Policy recommendations: Regional data at the subdivision level suggest targeted, local policy changes could play an important role in effectively and efficiently addressing Canada’s housing crisis.

Author:

Dr. Erkan Yönder, Associate Professor of Real Estate and Finance, John Molson School of Business at Concordia University

Dr. Erkan Yönder is an Associate Professor of Real Estate Finance and serves as the Director of the Jonathan Wener Centre for Real Estate at the John Molson School of Business, Concordia University. With a primary focus on real estate finance, Erkan’s expertise lies in commercial real estate and sustainable real estate. Erkan’s research has found its way into esteemed academic journals and has secured multiple grants from renowned institutions such as the National Pension Hub (NPH) and the European Public Real Estate Association (EPRA). Notably, his research earned him the Nick Tyrrell Real Estate Research Prize in the UK and the distinguished Best Published Article Award from Principles for Responsible Investment (PRI), a United Nations-supported initiative. Erkan has had the privilege of presenting his scholarly work at some of the world’s leading universities, including MIT, Yale University, the University of California, Los Angeles (UCLA), and Cornell University. Erkan received his PhD degree in Finance and Real Estate at Maastricht University.

This project was commissioned by the Equiton Research Fund in Real Estate at the John Molson School of Business. Equiton values and upholds the principle of academic independence in all its research partnerships.

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Key Factors Contributing to Rental Growth Across Canada

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