Overall demand for residential rental accommodation has historically been stable and is expected to increase in the future. Strong population growth, changing demographic trends, significant deterioration of home ownership affordability and the fundamental need for housing are expected to be the primary drivers of increased demand. Based on the Government of Canada's 2018 multi-year Immigration Levels Plan, Canada will welcome nearly one million immigrants over the next three years, the majority of which will settle in the REIT's existing markets.

In light of continuing increases in house and condominium prices, driven by limited supply of homes for sale in core urban centres and new mortgage rules that make new mortgages more difficult and costly to obtain, management expects the home ownership rate to continue to trend down over the long-term. Rising home prices remain a key catalyst in keeping home ownership out of reach for many. Combined with strong immigration in core urban centres such as Toronto, Ottawa, Calgary and Edmonton, demand for multi-residential rental accommodation is expected to remain strong.

Condominiums that are leased to tenants are currently the primary form of new supply of multi-residential rental housing and they typically target the higher-end customer segment. Accordingly, in many instances they are not affordable for the vast majority of the population, for purchase or for rent. As a result, the purpose-built rental apartment inventory is often the only affordable alternative for many who seek to rent versus pursuing home ownership or more expensive condominium rentals, which has resulted in high occupancies within traditional purpose-built rental apartments across most markets, even through economic downturns.

Renting provides tenants with certainty regarding rental payments for the length of the lease term. Recent rent control legislation in Ontario eliminates the risk of large rent increases for all properties during the entire period of a tenant's tenancy, including properties built after 1991, providing more predictability for tenants beyond their initial lease term. Home ownership on the other hand involves a far larger array of costs, with much less predictability. The use of mortgages for home ownership exposes owners to interest rate fluctuations. Renting provides the renter with greater flexibility and increased mobility.

Multi-Residential Rental Market Overview >>

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  Increasing Rental Demand >>
Overall demand for residential rental accommodation has historically been stable and is expected to increase in the future. Strong population growth... More >>

  Favourable Population Growth Outlook >>
According to Statistics Canada, the Canadian population is forecast to increase by 9% from 2016 to 2022, while Ottawa's population is forecast to grow by 7%... More >>

  Demographics and Propensity to Rent >>
Due to the importance of age on housing decisions, demographic shifts can have a profound impact on demand for different types of housing... More >>

  Home Ownership Rates and Declining Affordability >>
Diminishing house affordability across key markets is expected to limit the growth of home buying demand and lead to a greater share of renter households... More >>

  Limited Rental Supply Growth and Declining Vacancy >>
The replacement cost of multi-residential rental buildings is substantially higher than the value for which they can be purchased in the market... More >>

  Strong Average Rental Rate Growth >>
Rental affordability, measured as a percentage of personal income, in each of Toronto, Ottawa, Calgary and Edmonton has broadly remained in line... More >>

  Economic Data and Trends by Region >>
Canadian economic growth has been consistently strong over the past decade, with Canada leading all G7 nations in total GDP growth from 2007 - 2016... More >>

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