National Vacancy Rate Falls Below Average of Last 10 Years

 

Over the past year, increases in international migration and youth employment, along with population aging, caused demand for rental housing to rise. This growth outpaced growth in supply nationally. As a result, the overall vacancy rate for rental apartments in Canada fell to 2.4%.

CMHC has just released its Rental Market Report (RMR) for 2018. Published annually, the RMR analyses the findings of our fall Rental Market Survey and puts a spotlight on Canadian rental housing market trends. A couple of highlights from this year’s RMR:

• Nationally, growth in demand for purpose-built rental apartment units outpaced the increase in supply. This caused the vacancy rate to fall below the average of the last 10 years.
• Regionally, vacancy rates fell in Quebec, Alberta, Saskatchewan and the Atlantic region. They rose slightly in Ontario, British Columbia and Manitoba.

Vacancy rates decrease in most provinces

In Quebec, the vacancy rate fell significantly, from 3.4% in 2017 to 2.3% in 2018. Because of Quebec’s large rental housing stock compared to other provinces, the decrease there contributed greatly to the decrease in the national rate.

In the oil-producing provinces of Saskatchewan and Alberta, rental markets continued to recover from the 2014 oil crisis. In both provinces, rental demand was boosted by stronger net migration. This greater demand, combined with the weaker growth in supply in these two provinces, drove down vacancy rates. In Alberta, vacancy rates went from 7.5% in 2017 to 5.5% in 2018. In Saskatchewan vacancy rate went from 9.3% in 2017 to 8.7% in 2018.

In the Atlantic region, all provinces saw their vacancy rates fall. In Newfoundland and Labrador, though, while the vacancy rate fell from 6.6% to 6.0%, this represented a decrease of only about 20 units. Such relative stability was due to steady supply and demand, reflecting stagnant economic activity and moderate employment growth.

Ontario (1.8% versus 1.6% in 2017) and British Columbia (1.4% versus 1.3% in 2017) saw their vacancy rates increase slightly, while remaining amongst the lowest in the country. Manitoba, for its part, experienced a small increase in its vacancy rate, which rose from 2.7% in 2017 to 2.9% in 2018.These increases, however, were not enough to offset the downward national trend.