Period of rapid price climb ends as Windsor area rents stabilize

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After a rapid climb through the COVID pandemic, rents in the Windsor area have stabilized over the past year.

According to data released this month by rents.ca and the urban real estate data research firm Urbanation, the cost of a local one-bedroom apartment decreased 4.1 per cent while a two-bedroom unit decreased 1.2. per cent from the same time last year.

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“It’s a period of stabilization,” said Joyce Blackmere, director of sales for the Dan Gemus Real Estate Team.

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“We’ve had a couple of rental properties that have spent more time on the market than in recent years. Stabilization gives everyone a bit of a breather, more options and opportunities.”

The monthly rent in the area for a one-bedroom apartment/condo currently averages $1,553, while a two-bedroom averages $1,852.

The price in London for a one-bedroom is $1,770, while a two-bedroom unit averages $2,177.

Vancouver tops the Canadian rental rate list at $2,646 for a one-bedroom and $3,605 for a two-bedroom, while in Toronto the going rate is $2,459 and $3,224, respectively.

Blackmere said two factors impacting this period of stable prices locally are the increase in supply of rentals and condos and fewer students seeking rental accommodation.

“There are fewer students coming from outside of the country,” Blackmere said. “Students are generally the people looking for the one-bedroom units and more affordable apartments.

“Also, when you’re paying that much for a one-bedroom, there’s not going to be that many people looking for those units.

“To see that 4.1-per-cent decline, I don’t view that as much of an abnormality.”

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Manor Realty general manager Rob Agnew said the traditional equation involving supply and demand is also impacting the rental market. A growing population has led to a growth in the number of high-density housing projects that have been built or are in the construction/development stages.

“There are a lot of people leasing but the market has been able to keep up with the supply,” Agnew said. “The rental prices aren’t going to go up unless we see a shortage of supply develop.”

Agnew said in the last six months, 210 condos and 592 townhomes or residential homes have been leased locally. There are currently 87 condos available for lease and 226 residences or townhomes.

“That’s nearly 800 leases in six months, a huge number,” Agnew said. “However, there’s about a 1.7-month supply of condos and 2.8-month supply of residential units to lease. That will help keep prices stable.”

Agnew added the gathering strength of the home resale market is also helping to maintain the healthy supply of rentals as some people are opting not to renew their leases and are buying instead.

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A third factor in the market stabilizing is a slowing of the frenzy of interest from real estate speculators.

The migration from the Greater Toronto Area combined with the Windsor area’s historically lower prices fuelled the rapid rise in housing costs during COVID. With interest rates and prices now significantly higher, investors are being pickier to make the numbers work on such investments.

“We still see out-of-town and local investors,” Agnew said.

“But many have now renovated their purchases and put them back on the market to lease. The number of active listings are up, so that’s a positive.

“However, the economy has had an effect on everyone and the market is dictating what rents they can charge. It’s keeping rents down.

“I don’t see that changing much until we begin to see people arriving for all those new jobs next year.”

Dwaddell@postmedia.com

Twitter.com/winstarwaddell

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