While the rest of the country has seen a drop in rent, Oshawa’s has risen, according to the Rentals.ca National Rent Report for May.
The average monthly renting rate for all property types in Canada was down 1.4 per cent to $1,814 in May from April, according to the report. However, Oshawa finished 17th on a list of 34 cities for average monthly rent for a one-bedroom apartment at $1,500 and 16th for a two-bedroom at $1,780.
The list was topped by Toronto, which has seen a decline in rent over the last three months since the COVID-19 pandemic began.
According to Linda Porritt, an Oshawa real estate agent with Century 21, there could be several factors as to why Oshawa’s rent went up.
For Porritt, it mostly boils down to how competitive the rental market is in Oshawa.
“Oshawa ended up with a surplus of rental inventory following the 2017 real estate market… bubble burst,” she says. “A lot of people had bought properties because they were cheap, and they had bought them with the intention of reselling them, but they ended up… turning it into rental units.”
For a period of time immediately after 2017, she says Oshawa had a surplus of residential units.
She notes one such area where houses were “bought in speculation” was northeast of Durham College and Ontario Tech University.
“A woman approached me and said, ‘Hey, I’ve got this townhouse I paid $690,000 for,’ and I’m like, ‘Well, you’re not getting $690,000 for it today,’” she says. “That’s what happened. They bought new, and the prices they bought new for three years ago don’t stand up in todays market, so a lot of those houses and townhouses in that northeast quadrant became rentals.”
She says this added a big surplus to the market. But compared to other areas, she says one or two bedroom apartment rental prices are high.
“You just cannot find a one-bedroom – even a basement rental – for less than $1,000. It’s very difficult,” she says.
Even to get a two-bedroom apartment above ground, people are looking in the $1,500 to $1,700 range, says Porritt. For the main floor of a house it’s between $1,800 and $2,000.
“If you want a whole house, you’re over $2,000… and you’re paying all of the utilities,” she says.
Porritt says if Oshawa’s prices went up, it was probably in 2018 when all of these people who bought a house and couldn’t sell them suddenly had a property to manage.
She also notes other real estate agents in Oshawa are telling her that more than half of the transactions they’re doing are rentals.
“So that may also have something to do with it… in that people who have decided that they can’t buy for one reason or another, or it’s not the right time to get into the market, or whatever’s befallen them on account of COVID, they’re deciding they have to rent,” she says.
Oshawa may simply have a larger and more competitive rental population, which is why rent would have continued to increase despite the pandemic, according to Porritt.
She also points out many people may have been migrating out of Toronto, which would bring them east towards Oshawa because many have found they are now able to work from home.
“We’re starting to experience a migration from Toronto, and also maybe we have a better quality of rental due to all of those newer houses,” she says.