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Archived Articles
Simeon Mitropolitski is a Canadian analyst, of Bulgarian origin, and a former syndicated columnist with the Bulgarian News Agency (BTA). He is the author of several hundred articles dealing with hot political and economic topics, both national and international.
He was part of the first group of Bulgarian intellectuals and students that began the opposition movement that finally put an end to the communist regime in this country in 1989, and in 1996-1997 participated in international observation teams during the elections in several Balkan countries - Romania, Albania and Bulgaria.
In 2002 Simeon and his family moved from Bulgaria to Canada where they live now in Montreal, province of Quebec. Simeon is a Master of Political Science from McGill University and a B.A. of Political Science and History.
Global Real Estate Project
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Canada: The coming rental crisis in Montreal
Some say in the coming months a real crisis may occur on the rental market in Montreal. Other say the crisis is already here. For some all these apocalyptical prognoses have nothing to do with the reality and are only newspaper tricks in order to catch the public attention with stories that concern more than one third of the local population (landlords and tenants alike). Montreal is a particular city on the real estate market map of Canada and North America. It's the main city of the French-speaking province of Quebec. When in the 70s the nationalistic provincial government decided to make the French a compulsory language of the written communication in the local businesses thousands of local English speakers moved out of the province (many with their businesses). When in the middle of 90s the sovereignty of Quebec was at the reach of hand, many more English speakers moved out. This created an artificial abundance of empty residential (and office) spaces thus explaining why tenants' interests so long dominated the market. This also explains why in the past couple of decades the rents in Montreal were significantly lower than in Toronto or Vancouver, the other two major cities in Canada. But let's return to our initial question - is it a crisis on the rental market in Montreal right now? With vacancy rate below 1 percent (less than 1 out of 100 apartments available) we can definitely speak about a crisis. One year ago the vacancy rate was 1.5 percent, 2 years ago - 3 percent. But there are some specifics on the market. The least is the vacancy rate for the lower segment of the market - 1 and 2 BR non-furnished apartments for 700 CAD per month ($1 = 1.60 CAD) or less in the areas with higher than average immigration population and crime rates and worse than average public schools. That's why (here is the explanation of the above paradox) there are queues for low quality apartments. There are some additional reasons why the rental market becomes so profitable for the landlords nowadays. On one hand, many young people in their 20s profited from the good economic situation in the recent years to get out of the parental control. But far more important factor on the rental market is the massive influx of new immigrants (Quebec has its own immigration policy in the last decade). It's considered that 30,000 immigrants from abroad settle in Montreal every year (approximately 10,000 families). The total number of apartments for rent in the city is 350,000 with less than 3,500 available now on the rental market. These 10,000 new families (without proper credit history to get a mortgage loan) go on the rental market and shrink every month the pool of available properties. Thus we have now a crisis for the lower segment of the market. It began last year in July when is the traditional time for relocation. Hundreds of low-income families in Montreal for weeks were looking desperately for apartments and ended with accepting to rent more expensive spaces. If the trends keep steady, till the middle of 2002 we'll have a similar crisis for the middle-priced apartments (700-900 CAD per month). If this happens, only the most expensive spaces will remain on the market. The main problem for the rental market in Quebec is that it's highly regulated by the local authorities. That's why many investors prefer not to build new apartment blocks for renting and thus leave on the government shoulders the task of supplying the market. On the other hand, the government projects compete with the private investors' projects, which discourage the private initiative. The result we see clearly. The market regulations (intended to benefit the tenants) mean less new apartments, longer queues and (the final "benefit" for the tenants) families on the streets. What to do to clear up the house? The answer is simple - to deregulate wisely the rental market and to allow as much as possible private capitals for residential investments. Sound too simple. But the devil is in the details.
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See also the directory of companies providing real estate services in, and general real estate information of Canada.
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