The rental vacancy rate continues to decline across Canada, according to CMHC’s latest Rental Market Report.
The average vacancy rate for all unit sizes currently is 2.2%, the lowest figure since 2002, as demand continues to outpace supply.
CMHC points to the 1.5% vacancy rate in Montreal, a 15-year low, as impacting the national average. This is particularly noteworthy given that over 28% of Canada’s purpose-built units are in Montreal, as compared to Toronto’s 15% share of purpose-built units, and Vancouver’s 5.4%.
The average vacancy rate for Vancouver remains largely unchanged over last year at 1.1%. Likewise, Calgary remains unchanged at 3.9%. The overall vacancy rate in Toronto city limits is around 2%, slightly higher than in the Greater Toronto Area, 1.5%.
These vacancy rates differ between different types of units. For instance, in Vancouver, the vacancy rate for studio apartments is 0.7%, compared to 1.5% for two-bedroom units. That trend is reversed in the Toronto area, with studios at 2.1% and two-bedroom units at 1.4%.
Toronto’s market was impacted by an increase in inventory; however, CMHC attributes regulations that stifle homeownership as one of the factors keeping more renters in the market.
Rents increased an average of 4.7% in Vancouver, where there was a notable increase in condos rented long-term. This may be due to regulations which limit short-term rentals and tax vacant properties. Rents increased in Montreal by 3.6% but remain low — $841 on average — in comparison to Vancouver and Toronto, with average rents at $1,469 and $1,452 respectively. Rents increased by 6.8% in the Greater Toronto Area.
The Report also notes a widening gap between market rent and rent for occupied units in both Vancouver and Toronto. Recently, British Columbia lowered its rent increase guideline, which currently is on par with the rent increase cap in Ontario — 2.6% and 2.2%. In Vancouver, average market rent exceeds average occupied rent by over 20%. In Toronto, that gap is 25%. This appears to have led to a decrease in turnover rates.
From these numbers, landlords can glean that tenants are likely going to stay longer in units to avoid the shock of market rents. CMHC also found that more young renters, age 25-44, are securing full-time employment, leading to an increase of about 5% in that demographic. In addition, more temporary workers and immigrants are relocating to hot job markets, keeping demand high.
CMHC’s Rental Market Report contains in-depth data and analyses on 37 major centres. Click here or visit https://www.cmhc-schl.gc.ca for the latest rental market information.
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Disclaimer: The information provided in this post is not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.