RENTAL VACANCY RATE DROPS
The economic recovery in western oil- producing provi nces contributed to the first decrease in the national apartment vacancy rate in three years, Canada Mortgage and Housing Corp. 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 oil- producing 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 oilproducing 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, improving employment for young adults and the ongoing aging of the population.
High home prices also kept younger households in the rental market longer as they saved for down payments, said Durango. That’s particularly a factor in highprice markets like Vancouver and Toronto, where rental vacancy rates are very low.
Despite low vacancy rates in Ontario and B.C. there is adequate access to rental housing in some form in almost all centres, said Canadian Federation of Apartment Associations president John Dickie.
Between 22 and 38 per cent of all condos in Ontario and the West are rented and a “secondary market” of basements, suites and other units make up more than 40 per cent of total rental supply.
Associations chairman David Hutniak called on the federal government to examine tax policy for rental buildings, while provinces and cities need to look hard at their development charges and planning approval delays. “Those are the factors holding back muchneeded, purpose-built rental supply,” he stated.