Rents stabilizing with more supply in market

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For the third consecutive month, rents remained stable or even declined in the Windsor area according to a report compiled by rentals.ca and Urbanation.

Rent for a one-bedroom apartment ($1,530) declined by 0.3  per cent in June compared to May and was down 3.1 per cent compared to a year ago. A two-bedroom unit ($1,792) rose 0.1 per cent over May but is down 6.4 per cent in the annual comparison.

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“There is a lot of inventory right now with the students moving out,” said Patrice Surrette, owner of Windsor’s Goldmar Property Management.

“Some landlords are looking at the market availability and are trying to make their units look more affordable by setting a lower price point.”

Surette, who oversees the management of 1,000 units locally, said the market is also adjusting to a potential change in the number of international students coming this fall.

The federal government’s decision to cut down on the number of international students allowed into Canada has introduced an air of uncertainty into the market for landlords.

“That change could have an interesting impact on Windsor’s market,” Surette said.

“We’re not going to have as many international students at both the college and the university. That’s going to result in a higher number of vacancies and lengthen the time it’ll take to get tenants.”

Surette said the Windsor market is further stabilized by an increasing number of newly built condos coming onto the market for both sale and rent.

However, Surette noted the rentals for single-family homes and studios, which are in short supply in Windsor, continue to climb.

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“A lot of families are renting single-family homes because they can’t afford to buy,” Surette said. “A really nice home in a good area – people are still willing to pay for.

“We’re also seeing landlords get good prices for bachelor units.

“There are a lot of two and three-bedroom units, so there’s a high vacancy rate as there always is when students leave in the spring. Landlords are responding this time trying to fill those units by lowering prices to make them more attractive rather than wait two months to see if the students come back.”

Nationally rents have risen seven per cent over last June, but that is the slowest rate of increase in the past 13 months. The month-over-month decline of .8 is also the largest drop since 2021.

The national average for rent now stands at $2,185.

“Rents at the national level are clearly levelling out,” said Shaun Hildebrand, president of Urbanation.

“At this stage of the market, strong rent increases are mainly limited to inexpensive cities, particularly in the Canadian Prairies, while larger markets dealing with severe affordability issues are seeing rents slow or fall.”

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Windsor was part of a province-wide trend of rents heading downward. Ontario was the only province in Canada reporting a decline in rents in June.

The province reported an overall dip of one per cent for the combined averages of rentals for single-family homes/townhomes, condos and apartments.

The average price for a rental in Ontario was $2,382.

Prices in Ontario ranged from highs in Toronto for one- ($2,444) and two-bedroom ($3,199) units to Windsor’s rates on the low end. Windsor had the lowest average rental rate in the province and ranks 28th out of the 35 Canadian municipalities included in the report.

The highest rents in the nation were in Vancouver where renters were shelling out $2,724 for a one-bedroom and $3,648 for a two-bedroom rental.

Surette said the Windsor market is also evolving.

The area is seeing its single-family home rental options shrink as mortgage renewals at higher interest rates are making it increasingly difficult to make the numbers work for landlords.

“A lot of those single-family home rentals are now going back into the resale housing market,” Surette said. “It’s displacing tenants in some cases with the sale.”

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Surette said there’s also a return to increased movement by renters between landlords. That type of mobility, seeking better rents and or amenities, has been missing since the onset of the COVID pandemic.

“People who rented their unit more than five years ago aren’t moving because they have a good rental rate, but those who have rented in the past year or two are moving around more again,” Surette said.

“Rents haven’t changed much in the past two years, so they’ll seek lower terms and better amenities.”

Surette added there has also been a return of more negotiations with tenants. With the uncertainty around student rentals and the glut of units that were created to target that market in recent years, landlords are being more flexible rather than hoping there’ll be enough international students to fill all the rentals in two months.

Dwaddell@postmedia.com

Twitter.com/winstarwaddell

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