Rental Rates are Climbing Higher in Mississauga: Report
If you plan on looking for an apartment in Mississauga this summer, you no doubt know that the market—plagued by low inventory and sky-high prices—is a challenging one to navigate.
And while prices dipped a little in the spring, they're inching back upwards.
Following two months of decline, the average monthly rental rate in Canada increased 4 per cent in May, according to the June national rent report produced by Rentals.ca and Bullpen Research & Consulting.
Rentals.ca and Bullpen chart and analyze rents for more than 30 cities across Canada on a monthly and quarterly basis.
The situation is Mississauga has worsened slightly for prospective tenants.
According to the report, the average monthly rent for a one-bedroom in Mississauga was the fifth highest at $1,841. Two-bedroom rents are the eighth highest on the list of 34 cities, coming in at $2,245.
Prices are up significantly month-over-month.
In May, the average monthly rent in Mississauga sat at $1,768 for a one-bedroom apartment and $2,099 for a two-bedroom unit. While high, those prices were lower than they were in the winter months.
In February, tenants were paying $1,877 a month for a one-bedroom unit and two-bedroom units averaged $2,231 a month.
Mississauga is among 10 of 12 cities in Ontario for the highest average monthly rents for a two-bedroom home, which makes sense in a city where the rental vacancy rate sits at 0.8 per cent (a healthy vacancy rate is three per cent).
Unsurprisingly, Mississauga is challenging for tenants because rentals are highly in demand.
A section of the report called ‘Mississauga Insights,’ says the city is one of the most active markets on Rentals.ca, ranking eighth in total listings in Canada, accounting for 3.3 per cent of the national market.
This month, Rentals.ca took a closer look at the Mississauga market and discovered that some areas are better for tenants than others as far as inventory is concerned.
Rentals.ca discovered that there are more units with multiple bedrooms for rent in north Mississauga and southcentral Mississauga, with much smaller units in the central band, the smallest being located in the L5B area at 1.6. This area encompasses many of the investor-heavy high-rise towers in the Mississauga City Centre.
Rentals.ca says that more small units have been listed recently, with the share of one-bedroom rental and condo apartment units increasing from 48 per cent to 51 per cent between the two time periods.
The report also finds that more affordable units are becoming rarer, as the lower bound or "minimum rent" shown in the chart is much higher for all bedroom types, while the upper bound didn't change much.
"The average price for one-bedroom units has increased by about 2.9% between these two periods, while two-bedroom units actually declined despite the elimination of many lower-priced units," the report reads.
The report says the bulk of the listings in postal code L5B are condominium apartments leased by private landlords. The map below shows the location and average rent of the most active buildings in terms of listings in the area.
In some bad news for tenants, the report notes that almost all of the projects have average rents that fall between $2,000 and $2,400 per month, with a couple of the older projects experiencing higher rent levels (Tiara and Aspenview), but lower per-foot rents, as their unit sizes were larger.
Two projects that were not shown on the map were the Absolute World Towers, better known as the Marilyn Monroe buildings because they are on the east side of Hurontario in postal code L4Z. Tower 5 has had units listed for rent at $2,560 per month on average in 2019, while Tower 4 is slightly lower at $2,421.
So, are things expected to improve?
The report says that rents and demand for rental housing should continue to increase as the national unemployment rate is still declining. The report also notes that it's still difficult for tenants to enter the housing market, as the mortgage stress test—which requires borrowers to qualify at higher rates than what they'll ultimately be paying—is still in effect (and likely will remain in place for the foreseeable future as the federal government tries to keep Canadians from taking on more excessive household debt).
As for other Ontario hotspots, Toronto continues to lead the list for the average monthly rent for a one-bedroom home at $2,231 and took over the top spot from Vancouver for average monthly rent for a two-bedroom at $2,735.
In the Greater Toronto Area, the average rental rate increased slightly from $2,520 per month to $2,523 per month.
Quebec City has the lowest average monthly rent on the list with a one-bedroom going for $837 and a two-bedroom at $1,006 (so if you speak French and enjoy European touches, a move might be in order).
The report says that average rental rates in Ontario continue to outpace the other major provinces in Canada, as it costs a tenant about $600 more per month to live in a rental apartment in Ontario than in Alberta, Saskatchewan, Manitoba or Quebec.
“Rental rates continue to increase in all major markets outside the prairie provinces,” said Ben Myers, president of Bullpen Research & Consulting.
“Solid job growth and immigration continue to fuel housing demand, while the Office of the Superintendent of Financial Institutions remains firm on its continued support for the mortgage stress test, which has prevented many prospective homebuyers from affording an entry-level home.”
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