Relations between tenants and landlords in Quebec are much better than the media would have you believe, the heads of property owners' lobby group CORPIQ (Corporation des propriétaires immobiliers du Québec) believe.
“Watching the news makes us sometimes forget that there are good relations between most tenants and landlords,” Marc-André Plante, the 30,000-member landlords’ group’s director of public affairs and government relations, said.
Plante was speaking at the recent Quebec Apartment Investment Conference, at Montréal’s convention centre, during a session on solutions to a housing market under pressure.
According to a Leger Marketing survey conducted in September, there is an 87 per cent satisfaction rate between tenants and landlords, he said. In addition, 86 per cent of tenants deemed their rent increases in 2022 were acceptable.
“There’s a difference between what we hear and what goes on in reality on the ground,” said Plante, the former mayor of Terrebonne, Quebec’s 10th largest municipality.
Plante also cited a finding that 93 per cent of tenants are satisfied with their apartments, according to Statistics Canada: “This statistic never makes the news."
Quebec rents lower than most of Canada
He added that while “we hear it’s incredible how much rents have gone up in Quebec,” the reality is Quebec is still home to some of the least expensive rents in Canada.
Average monthly rents in Canada (excluding Quebec) were $1,395 in 2020. Meanwhile, average Quebec rents in 2022 were $973 and $1,022 in Montréal, he said.
Gatineau topped Montréal as having the province’s most expensive rentals at $1,269, reflecting its proximity to Ottawa where rents average about $350 higher per month, Plante said.
He noted that with people turning toward work from home during the pandemic, there has been a movement of people from Ottawa to Gatineau seeking lower rents.
In addition, fewer tenant households (25 per cent) in Quebec had to allocate 30 per cent or more of their incomes toward rent in 2021, compared with 33 per cent in the rest of Canada, he said.
CORPIQ has been lobbying for changes to the way Quebec’s rental board, the Tribunal administrative du logement, calculates rent increases.
Landlords who conduct major renovations to their properties can, in general, only increase rents by a few percentage points, thus dissuading them from doing needed work.
As a result, Plante said it can take up to 50 years for rental property owners to recoup the costs of a major renovation such as a new roof.
As it now stands, landlords who maintain their rental housing are not rewarded for good behaviour. “It’s a challenge if we want to protect the current rental housing stock,” he said.
100,000 housing unit shortfall
According to the Quebec home builders group APCHQ (Association des professionnels de la construction et de l’habitation du Québec), Quebec has a shortfall of 100,000 housing units.
As well, about 60 per cent of Quebec’s housing was built before 1980.
Plante said the key to affordable rental housing lies with the existing aging housing stock and not necessarily in new housing. He called for the creation of an aid program to incentivize renovations.
“The housing stock is exactly like the road network. It needs lots of love and upkeep.”
During an update on investment and transaction activity in the Quebec apartment market, James Palladino, managing director at RBC Capital Markets Real Estate Group, noted the market has adapted after having undergone major changes during the past year.
Twelve months ago, the multiresidential market was at its most vigorous in 10 years, with new players and new records for transactions being set.
However, but by the fourth quarter of 2022, the market was one in which smaller transactions of less than $50 million were prevalent, with investors showing a greater appetite for properties with more affordable rents.
Palladino added there is a trend in Europe of institutional investors turning their attention toward new rental housing developments, due to environmental and sustainability concerns, and no longer considering older housing developments.
North America is a bit behind Europe, but the trend should come to Canadian shores soon, he said.
Marc Hetu, senior vice-president at CBRE, said private investors who have a greater risk tolerance are now dominant in the Quebec market, while institutional investors have fallen by the wayside.
However, he expects that after a few volatile months, institutional players will make a strong return in Q3.
There will be a healthy multires market in the medium- to long-term and a very robust market in 2024, Hetu predicted.