ProFunds Mortgages


Strengthening Rentals to Meet Market Demand


With most Canadians priced out of housing and rental rates hitting record highs, investment in the rental market looks like a smart investment

With a massive shortage in rental units in Canada and skyrocketing prices for the units currently on the market, opportunities for real estate investors in the rental market have never been so good.

It’s one reason why Pro Funds Mortgages is strengthening its commitment to servicing commercial, multi-residential, and income-generating properties.

“As we see it, Canadians need rentals in numbers we haven’t seen in decades,” says Carmen Campagnaro, President of Pro Funds Mortgages. “We’re in a strong position to capitalize on this demand and deliver units onto the market that growing families desperately need.”

The tight rental market won’t change any time soon. In the last year, the average rent in Canada increased 11.1%. Renters in Toronto and Vancouver were hammered especially hard, with year-over-year increases for a two-bedroom apartment in Toronto of 24.3% and in Vancouver of 21.4%.

With rents hitting record highs—that two-bedroom in Vancouver costs $3,694—a family would have to move to Edmonton to find a similar sized apartment for under $1,500.

Escaping the madness by purchasing a home isn’t an option for most Canadians, either.

According to a recent report by Canada’s Parliamentary Budget Officer, most Canadians can’t afford to buy a house, even though house prices are falling.

The average price of a home in Canada shot up 52%, peaking at $840,000 in February 2022, when work-from-homers went nuclear to win bidding wars.

At the same time prices have cooled 7% since their February high—adding a glimmer of hope for desperate buyers—interest rates have climbed.

“The gap between the national average house price and what an average household could afford has increased from 45% in December 2021 to 67% in August 2022, a jump of 22 percentage points in just eight months,” says Yves Giroux, Canada’s Parliamentary Budget Officer. “This increase is attributable to higher mortgage rates, which have lowered household borrowing capacity.”

As Campagnaro sees it, the only way to solve the problem in the long-term is to build more rental units.

“The market needs to meet the demand with more supply,” she says. “That’s why we’re pivoting to rentals. We can help solve the supply problem without compromising on quality and deliver handsome profit to our investors.”

In July, Valour Group, a sister company to Pro Funds Mortgages, broke ground on 301 Westmount, a new rental development adjacent to the Victoria Westmount Center in Kitchener-Waterloo. The two-building complex will supply 85 residential units and ground floor commercial rentals to Kitchener’s starving rental market.

“301 Westmount is one of many rental projects where we expect to make a noticeable difference,” says Campagnaro.

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