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portion of their payment has doubled
in 12 short months. Other homeowners
who had fixed rate mortgages are seeing
their payments increase as their fixed rate
mortgages come due. This has created
an affordability crunch. According to
Statistics Canada in 2016, 61% of Canadian
homeowners have a mortgage. So, a rapid
increase in rates will have an effect on a
significant percentage of the population.
Incomes have not increased as the same
rate or speed as interest rates, tightening
affordability.
The rapid change in affordability has
meant new purchasers are waiting to buy
their first home, staying in rental homes
instead of purchasing their own homes. This
lack of movement in the housing cycle has
created a shortage of rental openings. That
lack of movement and the huge number
of new immigrants looking for rentals has
driven up the price of open rental units.
The vacancy rate for rental homes in 11
major markets in Ontario ranges between buyers out of the market. The turnover rate for more affordable housing. This creates
1.1 percent and 2.8 percent. Currently these decreased from 21% of units in the market longer and more costly commutes to work.
levels are at record lows. Peterborough is to only 13% in 2022. This is in a town that These longer commutes add to the length
the lowest at just over 1 rental home vacant has a lot of university and college student of the workday and increased frustration.
in every 100 rental units. This is the lowest renters which normally means a high Affordability is a huge problem.
level in over 20 years. The turnover rate in turnover of rental accommodations. Another housing issue facing the retail
that market has diminished to 9.5%. That London, St. Catherines, Kingston, lumber and building materials dealers
is one of the lowest rates in Ontario. This Sudbury, Belleville, Ottawa and Toronto comes from the fact that most LBM dealer
is in a town that has traditionally had a all had similar rental home price increases sales to new construction homes come
large amount of rental unit turnover due and lack of availability from 2021 to 2022. from single detached homes and semi-
to university students. Average rental rates Kingston’s vacancy rate is 1.2% with detached homes. The Ontario Home
have increased 5.4% on two-bedroom units average two-bedroom rents at $1471/ Builders association statistics show that the
to over $1339/month. The average rent on month and turnover rates 21.6% higher number of detached and semi-detached
a turnover unit (someone moving out/ new than existing units. Toronto, Ontario’s homes has shrunk from over 67% of the
people moving in) increased 23% on a two- largest market, showed similar issues with market in 2000 to 24% of the market in
bedroom. an average rent of $1765/month and a 2022. Row housing and Apartments/Condos
Kitchener has a vacancy rate of 1.2% vacancy rate of 1.7%. There is no area of have grown to represent the lion’s share
with average rates on a two-bedroom unit the province that has not had substantial of the market today. The concerning part
at $1469/month. This average rate has increases in rental rates along with a of this is apartment homeowners typically
increased 7.2% year over year. In Hamilton, dramatic decrease in vacancy rates. don’t purchase decks, fences and they don’t
the vacancy rate is 1.9%. The average The rapid increase in rental prices have basements to finish. All of these are
exiting tenant paid $1326 for a two- combined with the increase in mortgage important elements in the flow of materials
bedroom unit while the new tenant paid rates has made it a challenge for staff of from LBM retailers to homeowners. The
$1679. A 26.6% rate increase in a year. In retail building material outlets and for growth of apartment buildings is increasing
Hamilton, only 12% of all vacant units were staff at suppliers of building materials as land availability becomes an increasing
available to a person earning $46,000 per as well. Wage growth and pressure to issue.
year. Most of the vacant units in Hamilton increase wages has been a problem post
were only affordable to renters with a Covid. Even with the increasing wages, Solutions to the Problems
yearly income of at least $65,000. staff are facing a gruelling task to find and That was the depressing part. The market
In Windsor there were bidding wars for afford suitable housing. Places like London is filled with gloom and doom. There are
rental accommodation for the first time has an average rent of $1664 per month several potential solutions to the housing
in 2022. MLS sales of homes were down for a turnover two-bedroom apartment, crisis in Ontario. This is a crisis that has
37%, below the five-year average but making this unaffordable to 60% of renter been created over a number of years and
affordability issues have kept perspective households in the area. This causes staff to solutions will take time.
live outside of the area they work, looking One of the possible solutions to correct

www.lbmao.on.ca LBMAO Reporter - July-August 2023 17