Canadian residential landlord Canadian Apartment Properties Real Estate Investment Trust (CAPREIT) said its first quarter results benefited from rising demand across the country’s rental housing market. 

The company reported monthly rental turnover prices rose by 10.2 per cent, or approximately $142, in the three months that ended Mar. 31, driven mostly by strong demand in B.C., Ontario and Nova Scotia.

“When you're seeing these rising quarterly rents, it's because we've been through some very difficult times,” CAPREIT Chief Executive Officer Mark Kenney said in an interview on Tuesday. “While Canadian home prices were surging during the pandemic, rental rates were falling quite severely.”

Since then, the rental market has seen a recovery and the company’s rental occupancies ticked higher to 98 per cent from 97.3 per cent in the quarter.

“We did, I think, quite a good job during the pandemic of maintaining robust occupancy at our deepest, most dark time of competition. We hit close to four per cent vacancy but things have been strong,” Kenney said.

Despite a recent cooling in the housing market, surging home prices have become out of reach for many homebuyers, which has led to high demand for rental units, the company said in a press release on Monday.

CAPREIT operates around 67,000 units in Canada and Europe, Kenney said, including manufactured home sites, which are land lease communities where residents can own a home and lease the land they live on.

Manufactured home sites are a potential solution for improving housing affordability, Kenney said.

While the company brought in higher rental income, total operating expenses surged by almost 16 per cent year-over-year, mainly due to higher hydro-related costs.

“Higher utilities were driven mostly by natural gas price increases. Other operating expenses were impacted by higher boiler and weather-related maintenance costs as well as snow removal costs” Jimmy Shan, an analyst at RBC Dominion Securities, wrote in a Monday note to clients.

On Tuesday, Shan maintained his outperform rating (the equivalent of a buy) on CAPREIT’s stock but reduced his 12-month price target to $66 from $69 per unit.