Are you looking for a rental lease or a property purchase this year? If yes, then there is something that would be surprising to you. However, while real rents in the major urban centers of Canada are declining, the lesser markets are experiencing surprising increases in rents. The change has surprised many Canadians. According to the trends, the new year is where the rent vs buy dilemma needs to be addressed especially for these smaller cities.
The latest study pointed out this unusual pattern. Rental prices are down in large cities such as Toronto and Vancouver. However, other cities such as Quebec City, Regina, and Gatineau have been experiencing aggressive rent increases.
Therefore, for those of you thinking about the rent vs buy question, it is very important to know how the markets are performing. What has happened to the rest of the country, and on such a smaller level, why are the rates increasing?
What’s Causing Rent Declines in Big Cities?
While smaller markets feel pressure, the story is different in major cities. Toronto and Vancouver, once known for sky-high rents, are now seeing those prices drop. According to the latest report, Vancouver’s average rent fell by 6%, and Toronto’s dropped by 7%. What’s driving this change?
- More Rental Units Are Available: In recent years, big cities have seen a boom in new apartment construction. More buildings are being completed, adding more rental units to the market. With more options available, renters have more choices, and landlords are lowering prices to stay competitive.
- Slower Population Growth: Population growth in cities like Toronto and Vancouver has slowed. Fewer people moving to these cities means less demand for rental units, which is pushing rent prices down.
- Changing Preferences: Some people are also rethinking city life. After the pandemic, many Canadians want more space, and they’re finding it in smaller towns. This shift is reducing the number of renters in big cities, contributing to the price drop.
Should You Rent or Buy in 2024?
With rent prices going up in some places and down in others, many people are asking themselves the same question: rent vs. buy? The answer isn’t simple. It depends on your personal situation and where you want to live.
Renting in Smaller Markets
If you’re considering renting in a smaller city, be prepared for higher prices. In 2024, places like Quebec City, Regina, and Gatineau have seen rent increases of over 15%. That’s a big jump compared to last year. However, renting could still be more affordable than buying, depending on the local housing market.
Before you decide to rent, consider the possibility that rent prices could keep rising. If more people move to these smaller cities and new housing doesn’t get built fast enough, rents might go even higher. On the other hand, if more apartment buildings are completed in the next few years, prices might stabilize.
Buying in Smaller Markets
Buying a home in a smaller market might be a smart move, especially if you plan to stay for several years. While home prices in these areas are going up, they’re still much lower than in major cities. By buying, you can lock in your monthly payments and avoid rising rents.
However, there are challenges to buying in 2024. Mortgage rates are higher, and qualifying for a home loan can be tough. You also need to think about the extra costs of owning a home, like maintenance, property taxes, and insurance. But if you’re ready for these costs, buying in a smaller market could offer long-term stability.
What’s Next for Canada’s Rental Market?
Looking ahead, it’s hard to predict exactly what will happen in the rental market. Rent vs. buy is a big question many Canadians are asking. If population growth in major cities stays slow and more housing is built, rent prices in big cities might keep dropping. At the same time, smaller markets might continue to see rent increases if more people move to those areas.
Several factors could influence these trends. If more people return to city living, demand for rentals in big cities could increase, pushing prices back up. On the other hand, if smaller markets don’t build enough new housing, rents in those areas could keep rising. Either way, renters and buyers will need to keep a close eye on these changes.
What Should You Do?
Deciding whether to rent or buy in 2024 depends on your personal situation and where you want to live. If you’re in a smaller market, renting might cost more than you expect, but it could still be cheaper than buying. If you’re in a big city, renting could be more affordable now than it’s been in recent years. No matter where you are, make sure to weigh your options carefully.
Thinking about your next move in 2024? Whether you’re debating rent vs. buy, take the time to explore the market and figure out what works best for you.
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