COVID-19 putting pressure on small-town rents: “I can’t afford to live in the city I grew up in”

COVID-19 putting pressure on small-town rents: ‘I can’t afford to live in the city I grew up in’

When Christine Grice, a single mother, started looking for apartments to rent in Dundas, a community in Hamilton, Ont., in June, she said she was shocked by what she was seeing.

It isn’t just that a two-bedroom is now going for $1,795 in the very same building where Grice was renting a three-bedroom apartment for $1,650 only three years earlier.

It’s that rents seem to be climbing as Grice is searching.

“Their website says $1,399 (a month) but … when you get there it’s $1,499,” she says.

Grice says she has noticed quick rent increases both for large, professionally-managed properties and basement apartments advertised on Kijiji.


And available units are being snapped up at record speed, she says.

“You have to be fast,” she says, recalling how an apartment advertised for rent on a Friday already had applications the following day.

“I think it’s ridiculous that I can’t afford to live in the city I grew up in,” she says.

Rental bidding wars and cutthroat competition were routine fare in pricey markets like Toronto and Vancouver before the pandemic. But as government-imposed restrictions lift and activity revives in both the rental and property market, some of that big-city frenzy is coming to nearby smaller towns.

Hamilton has seen a 37-per cent year-over-year increase in rental transaction in June, says Mustafa Abbasi, president and chief revenue officer of online real estate marketplace, citing data from the Real Estate Association of Hamilton and Burlington.

At the same time, average rent has climbed by a whopping 9 per cent in July, from $2,200 to $2,400.

The numbers indicate a “substantial increase” in demand for rentals in the area, he says.

A similar phenomenon seems at play in Abbotsford, B.C., about an hour’s drive east of Vancouver, Abbasi notes.

There, rents rose by 15.8 per cent in June compared to the same period last year — one of the highest increases across Canada, according to Abbasi.

Those trends stand in marked contrast with what’s happening in Toronto and Vancouver, where the pandemic is putting downward pressure on rents.

The average rent for a vacant one-bedroom unit in Toronto is down more than 9 per cent compared to a year ago, while two-bedroom apartments are now 4.4 per cent cheaper, according to an analysis by rental listings site

In Vancouver, the average rent for a one-bedroom remained virtually flat, while the average vacant two-bedroom is now 6.7 per cent cheaper.

What’s driving up rents in smaller towns?

Part of what’s driving new renters to smaller towns may simply be affordability. In a June survey of more than 16,000 renters across Canada, showed that half said they would need to look for more affordable rentals because of the pandemic.

he recession triggered by COVID-19 has disproportionately hit low-wage workers, labour market data shows. And lower-income income families are more likely to be renters.

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But what’s fueling rental demand in communities like Hamilton and Abbotsford likely goes beyond financial necessity.

Much of it likely also has to do with the shift to working from home, says Abbasi.

“Consumers are also looking at their working space: do they have enough space to work from home permanently?”

Workers who have been confined to typing from the couch of their bachelor apartment are craving more space. Parents who’ve been sharing the kitchen table with their children are longing for a home office.

At the same time, as employers get used to having employees work remotely, big-city dwellers probably feel they can relocate further afield from the office, Abbasi says.

And while many renters are likely looking for larger units, prospective homebuyers are also adding to the pressure on small-town real estate markets, he adds.