Canada’s apartment vacancy rate dropped lower this year, down to 3%, that according to the latest CMHC Rental Market Survey released last week.
CMHC attributes the low vacancy rate to recovery of rental demand in oil-producing areas like Calgary, which had experienced a spike in vacancies from 1.4% in 2014 to 5.3% the following year.
The Survey includes both the primary and purpose-built rental markets as well as the secondary rental market covering condominium apartments.
According to Gustavo Durango, Senior Market Analyst at CMHC, demand increased for purpose-built rental apartment units which outpaced the growth in supply, leading to a decline in the vacancy rate, a reversal of the trend seen over the past couple of years. “Demand for purpose-built rental apartments can be attributed to historically high levels of positive net international migration, improving employment conditions for younger households and the on-going aging of the population,” Durango adds.
Kelowna and Abbotsford-Mission are tied for lowest vacancy at 0.2%. Victoria is at 0.6%, followed by Kingston at 0.7% and Vancouver at 0.9%. Toronto’s vacancy rate is 1%.
Conversely, Saskatoon’s 9.6% is the highest vacancy rate from the Survey. Regina and Edmonton tied for second at 7.0%. St. John’s scored 7.2%.
The CMHC reports that, since October 2016, the number of purpose-built rental apartments in Canada increased by roughly 23,000 units, or 1.2%.
The largest rent increases are in British Columbia and Ontario, led by Kelowna at 8.6%. Victoria rents increased by 8.1%. Vancouver saw an average increase of 6.2%, and Belleville 5.9%. Toronto rents climbed by 4.2%.
The average monthly rent for a two-bedroom apartment across Canada’s major centres is $989. Vancouver tops the list of highest rents, with an average two-bedroom apartment costing $1,552. Toronto follows at $1,404, and average rent for a two-bedroom apartment in Calgary is $1,247.
Rents decreased in Saskatchewan and Alberta. Saskatoon and Edmonton saw at drop of 1.3% and Calgary lost 1.0% over last year. The lowest rents nationwide are $594 in Trois-Rivières, $605 in Saguenay, and $631 in Sherbrooke.
The national average turnover rate stood at 20%, essentially unchanged from October 2016. Turnover rates were above the national average in Saskatchewan, Alberta, Manitoba, New Brunswick and Nova Scotia and below the national average in British Columbia, Ontario, Quebec, P.E.I., Newfoundland and Labrador.
CMHC’s Rental Market Survey also covers condos on the secondary rental market in major cities. Condo rental vacancies ranged from 0.2% in Victoria to 6.9% in Edmonton. The highest average rents for a two-bedroom condo are $2,301 in Toronto, followed by Vancouver at $1,874, and Ottawa at $1,566. The lowest rents include $996 in London, $1,052 in Québec, and $1,061 in Gatineau.
Tailor-made market reports are available for Canada, the provinces, Yellowknife and major centres. Visit CMHC for more information.
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