Vacancy rate falls to three per cent: CMHC

The economic recovery in Western Canadian oil-producing provinces contributed to the first decrease in the national apartment vacancy rate in three years, the Canada Mortgage and Housing Corporation said Tuesday.

In its 2017 Rental Market Report, the federal agency said 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.

That returns the national vacancy rate to its 10-year average after a two-year spike.

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

In a sign that Alberta continues to adapt to the 2014 oil price shock, the province had Canada’s third-largest growth in occupied rentals after Ontario and Quebec.

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

Alberta’s vacancy rate fell to 7.5 per cent in October from 8.1 per cent a year earlier, led by Lethbridge which was down 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,” said Durango.

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

Demand was helped by high levels of international migration.