OTTAWA, November 28, 2017 — The average vacancy rate for purpose-built rental apartment units across Canadian centres with a population of 10,000 or more decreased from 3.7% in October 2016 to 3.0% in October 2017, according to Canada Mortgage and Housing Corporation’s (CMHC) 2017 Rental Market Survey. This reverses the increases observed in 2015 and 2016 and leaves the vacancy rate at its 10-year average. This national decline reflects a recovery in rental demand in Canada’s oil-producing provinces.
The Rental Market Survey provides data and analysis for both the primary and purpose-built rental market as well as the secondary rental market covering condominium apartments. Tailor-made reports are available for Canada, the provinces, Yellowknife and major centres.
“Nationally, increased demand for purpose-built rental apartment units outpaced growth in supply, leading to a decline in the vacancy rate and a reversal of the trend we’ve seen over the last two years,” said Gustavo Durango, Senior Market Analyst at CMHC. “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.”
The primary (also known as purpose-built) rental market, consists of occupied units in privately initiated, purpose-built rental structures of three units or more.
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Gustavo Durango: “Increased demand for purpose-built rental apartment units outpaced growth in supply, leading to a decline in the vacancy rate and a reversal in the trend we’ve seen over the last couple of years. Demand for purpose-built rental apartments can be attributed to historically high levels of net international migration, improved employment conditions for younger households and the on-going aging of the Canadian population.”
Kelowna and Abbotsford-Mission (both at 0.2%), Victoria (0.6%) and Vancouver (0.9%), Kingston (0.7%) and Toronto (1.0%), have the lowest purpose-built rental vacancy rates.
Saskatoon (9.6%), Regina and Edmonton (both at 7.0%) and St. John’s (7.2%), have the highest purpose-built rental vacancy rates.
Since October 2016, the number of purpose-built rental apartments in Canada increased by roughly 23,000 units, or 1.2% - about half of the growth rate from the previous survey.
The average monthly rent for a two-bedroom purpose-built rental apartment across Canada’s centres is $989.
The largest rent increases are in British Columbia and Ontario – led by Kelowna (8.6%), Victoria (8.1%), Vancouver (6.2%), Belleville (5.9%), Oshawa (5.2%), Hamilton (5.1%), Barrie (4.6%) and Toronto (4.2%).
Average monthly rents for two-bedroom apartments in new and existing buildings are highest in Vancouver ($1,552), Toronto ($1,404) and Calgary ($1,247).
Rent decreases occurred in Saskatchewan and Alberta, including Saskatoon and Edmonton (both at -1.3%) and Calgary (-1.0%).
Lowest rents are in Trois-Rivières ($594), Saguenay ($605) and Sherbrooke ($631).
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., and Newfoundland and Labrador.
CMHC’s Rental Market Survey also covered condominium apartments offered for rent on the secondary rental market in 17 major centres across Canada. The average rental condominium vacancy rate across all surveyed centres declined from 1.9% in October 2016 to 1.6% in October 2017. In October 2017, rental condominium vacancy rates ranged from a low of 0.2% in Victoria to a high of 6.9% in Edmonton. The highest average two-bedroom rental condominium rent was in Toronto ($2,301), followed by Vancouver ($1,874) and Ottawa ($1,566). The lowest rents were recorded in London ($996), Québec ($1,052) and Gatineau ($1,061).
As Canada’s authority on housing, CMHC contributes to the stability of the housing market and financial system, provides support for Canadians in housing need, and offers objective housing research and information to Canadian governments, consumers and the housing industry.