Publication date: Sep 17, 2022 • 22 hours ago • 3 minutes read • 32 Comments A For Rent Sign. (NICK BRANCACCIO/Postmedia Network

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The average rent for a one-bedroom apartment in London soared so high in August that it even eclipsed parts of the greater Toronto area.

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Landlords in London last month were asking a record $1,783 on average for one-bedroom units, up 36.9 percent from a year ago, according to the latest market report from Rentals.ca. Subscribe to receive a curated collection of links and highlights from our award-winning breaking news coverage, in-depth analysis and unparalleled investigative weekday features. By clicking the subscribe button you consent to receive the above newsletter from Postmedia Network Inc. You can unsubscribe at any time by clicking the unsubscribe link at the bottom of our emails. Postmedia Network Inc. | 365 Bloor Street East, Toronto, Ontario, M4W 3L4 | 416-383-2300

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That price surpassed that of communities like Scarborough on Toronto’s east side ($1,673), Hamilton ($1,696) and Kitchener ($1,723) for the first time since Rentals.ca, a website that landlords use to advertise their properties, began tracking rental data in late 2018. Vancouver leads the country at $2,574, followed by downtown Toronto’s Old Town at $2,329, according to Rentals.ca data. Strong demand combined with a supply unable to absorb growing market needs is the main factor driving rents up in recent years in London, the fastest-growing area in Ontario according to the latest census data.

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But there are other factors at play. One of them, experts say, is the Bank of Canada’s recent rate hike as it tries to fight inflation. “The rate going up is keeping a lot of people out of the housing market,” said Paul Danison of Rentals.ca. “When interest rates go up, that means a significantly higher monthly payment for people buying a home, so some will stay on the sidelines and not jump into the housing market.” The median resale price of a home in London in August was $648,000. With an adjustable rate mortgage and a $39,000 down payment, that would translate to a monthly payment of $3,450.

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Although the COVID-19 pandemic has offered a brief reprieve for renters, keeping local rents relatively stable, the return of students for classes at Fanshawe College and Western University is also a contributing factor to rising rents, putting additional pressure on already tight market. Prices can also be affected by new stock coming onto the market, as new units typically rent for higher prices than older units. Also, provincial rent controls for apartments built after 2018 ended. But the key is that more homes are needed to cool the city’s rental market, Danison said, noting that London is not alone, with the national average rent for all properties also hitting a record in August at $1,959. “There just isn’t enough supply for all the demand out there,” he said. “We definitely need an offer at all levels. . . Any kind of supply is helpful.”

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The London Food Bank is noticing the squeeze caused by higher rents in the city among its customers, co-chief executive Glen Pearson said. Rental costs are the No. 1 reason behind the increase in food bank users, he said. More troubling, however, is the fact that rentals are also creating a new kind of user, Pearson said. “A huge uptick in people coming to food banks are people who are working, people who are able to pay their rent, but now they can no longer bridge that to pay for food,” she said, adding that she is concerned that the housing crisis will worsen unless more decisive action is taken. “People who come to food banks and work, they’re the canary in the coal mine,” Pearson said. “We may be looking at a whole new economic reality. . . and I think we need to start showing a lot more urgency about how we’re going to solve this issue.” [email protected] Twitter.com/JuhaatLFPress

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