Canada’s apartment vacancy rate decreases, thanks in part to Alberta’s economic rebound

The economic recovery in Alberta contributed to the first decrease in the national apartment vacancy rate in three years, the Canada Mortgage and Housing Corp. said Tuesday.

Its 2017 Rental Market Report found the vacancy rate for purpose-built rentals in Canadian cities with at least 10,000 people fell to three per cent in October, down from 3.7 per cent a year earlier. In Alberta, which continues to adapt to the 2014 oil price shock, the vacancy rate fell to 7.5 per cent, from 8.1 per cent in October 2016.

“We’re finding that demand is strong for rental in Canada, including in some of the oil-producing sectors that were not performing as well over the last couple of years,” said Gustavo Durango, senior market analyst at CMHC.

Alberta had the country’s thirdlargest growth in occupied rentals after Ontario and Quebec.

Michael Markidis of Desjardins Capital Markets said it’s a sign “the bleeding has stopped in most of the major markets located in oilproducing provinces.”

The apartment vacancy rate in Calgary declined for the first time since 2013 despite a strong increase in rental supply, CMHC said. The city’s October vacancy rate fell to 6.3 per cent, from seven per cent a year earlier.

Edmonton was largely unchanged at seven per cent, while Lethbridge saw the biggest decline, falling 3.4 percentage points to 5.1 per cent.

“It still has a high vacancy rate relative to Alberta’s history but it’s off the peak that we saw the last couple of years,” Durango said.

Nationally, demand outpaced supply. The number of rental apartments increased by 1.2 per cent, or 23,000, in the past year, about half the growth rate noted last year.

Demand was helped by high levels of international migration, improving employment for young adults and the ongoing aging of the population.

High home purchase prices also kept younger households in the rental market longer as they saved for down payments, Durango said. That’s particularly a factor in highprice markets such as Vancouver and Toronto, where rental vacancy rates are very low.

Vacancy rates were lowest in the B.C. cities of Kelowna and Abbotsford-Mission at 0.2 per cent, and highest in Saskatoon at 9.6 per cent.

The average national monthly rent for a two-bedroom rental apartment rose 2.8 per cent to $989, outpacing inflation of around two per cent.

Average monthly rents for twobedroom apartments were highest in Vancouver at $1,552, Toronto $1,404 and Calgary $1,247.

They were lowest in Trois-Rivieres, Que., at $594.