London landlords offer referral bonuses to woo tenants in softer rental market

It's a sign of the times in a London rental market that hasn't been this soft since the early days of COVID-19.

Posted in the common area of an apartment building at 500 Ridout St., there is a poster offering a $300 credit on rent for referrals. It says the money will be paid to existing tenants who successfully recommend new people who move in.

The building is managed by TerraCorp Management, which did not respond to calls from CBC News for comment. However, the incentives the company is offering for other buildings they manage include one month free rent and $1,000 off the first month's rent.

Jiacomo Ladas is with the rental listing website Rentals.ca. He told CBC News he's seeing London landlords offering all kinds of perks to fill vacant units in their online listings.

"We haven't seen the demand like this really since COVID, when people were literally scared to leave their homes," he said. "If you look at London rentals right now, you'd be surprised by the number of people offering one month's free rent, two months' free rent. There are a few buildings that are giving away gift cards to Cherry Hill Mall."

Another common perk Ladas has seen lately to lure prospective tenants is free internet access.

"Property managers are trying really hard now to not only get the attention of renters, but also renter retention," he said.

Rental data for London pointed to decreasing rents and higher rental vacancies for more than a year.

Canadian Mortgage and Housing Corporation (CMHC) reported that London's apartment vacancy rate across the city jumped from 1.7 per cent up to 2.9 per cent between 2023 and 2024.

When those numbers were focused on downtown London buildings, the vacancy rate rose even more, from 1.7 per cent to 4.1 per cent.

Data compiled by Rentals.ca shows rents for one-bedroom apartments in London are down by 6.5 per cent from this time last year, said Ladas. Two-bedroom apartments are about five per cent cheaper than last fall.

"It's a reflection of where the market is right now, where demand is really low and property managers have to get creative," he said.

A handful of factors are putting downward pressure on rents. New housing supply is coming to the market, and efforts by the federal government to reduce immigration and cap the number of student visas are all playing a role. Ladas said London is following a trend that's reflected, to varying degrees, in other Canadian cities.

Michelle Teichroeb is president of Harrison Carter Group, a London property management company that screens and places tenants.