Montréal, November 28, 2016 - Rents much lower than elsewhere in the country favor Quebec tenants, but reduce the financial capacity available to owners to restore the housing stock.
Based on rental market reports released this morning by the CMHC, it appears that in Quebec the average rent for a four-and-a-half-bedroom unit is 22% lower ($ 751) than the Canadian average ($ 962). The rate of deviation is even 33% if Quebec is excluded from the average rent for the whole country, according to CORPIQ’s calculations. The gap appears similar for a three and a half type unit.
CORPIQ believes that low rents in Quebec directly affect the quality of rental buildings, which have a significant maintenance deficit. According to a survey conducted last October among 1155 landlords, 24% of homes require minor renovations and 17% are in need of major renovations.
Yet, Quebecers generally have the means to pay more for housing. Rents in Québec have increased 9% in constant dollars since 1996, while after-tax income of tenants increased by 22%. (1) The fact that rents are so low favors tenants who want to live alone, a trend more pronounced in Quebec than elsewhere in the country.
The housing vacancy rate, which reached its highest level of the last 20 years in October, complicates the situation of homeowners:
Hans Brouillette, CORPIQ’s Director of Public Affairs explains that "more homeowners, especially those with dilapidated housings, are deprived of the revenue needed to renovate. In Quebec, we are continuing to increase the maintenance deficit in our housing stock without being able to carry out the required renovations. Interest rates to finance them are at a historic low, but with no possibility of adjusting rents and thus recovering expenses, the window of opportunity will close and these renovations will not have been made."
We remind you that CORPIQ and APCHQ recently joined forces to ask the Quebec government to introduce a tax credit to encourage homeowners to carry out renovations to improve the energy efficiency of rented dwellings, thus reducing consumption bills.
Finally, CORPIQ asks Martin Coiteux, the Minister responsible for the Régie du logement, for a revision of the criteria for rent fixation, which currently amortizes the cost of renovations over a record 40 years. In the 1980s, recovery took place in 8 years. This exceeds the useful life of the renovation, as well as the duration of mortgage financing.
(1) Statistics Canada, Income Statistics, SLID & ECR, et CANSIM, tables 326-0021 and 027-0040
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