For those of you that tried to rent a condo or apartment in 2011, the following should come as no surprise!
Here’s a report from Canada Mortgage & Housing Corporation that’s chalk full of statistics you’d otherwise have a hard time finding with your Google-fu…
OTTAWA, December 13, 2011 — The average rental apartment vacancy rate in Canada’s 35 major centres decreased slightly to 2.2 per cent in October 2011, from 2.6 per cent in October 2010, according to the fall Rental Market Survey released today by Canada Mortgage and Housing Corporation (CMHC).
“Modestly higher levels of employment among persons aged 15 to 24 likely increased household formation among young adults, thereby increasing rental housing demand. This, combined with the supply of newly constructed rental apartments moving slightly lower, pushed Canada’s vacancy rate downward, said Mathieu Laberge, Deputy Chief Economist at CMHC’s Market Analysis Centre. “Demand for rental condominium apartments remained strong, with the vacancy rate for such units falling in most of Canada’s largest urban centres, including Toronto, Montreal and Vancouver.”
The results of CMHC’s fall survey reveal that, in October 2011, the major centres with the lowest vacancy rates were: Regina (0.6 per cent), Winnipeg, Kingston and Guelph (1.1 per cent), and St. John’s (1.3 per cent). At the provincial level, Manitoba had the lowest vacancy rate at 1.0 per cent. Newfoundland and Labrador (1.3 per cent) and Saskatchewan (1.9 per cent) were the other provinces with vacancy rates below 2.0 per cent.
The survey reveals that the major centres with the highest vacancy rates were: Windsor (8.1 per cent), Abbotsford (6.7 per cent) and Saint John (5.9 per cent). On a provincial basis, the highest vacancy rate was in New Brunswick (4.8 per cent).
The Canadian average two-bedroom rent in new and existing structures was $883 in October 2011, compared with $860 in October 2010. With respect to the Census Metropolitan Areas (CMAs), the highest average monthly rents for two-bedroom apartments in new and existing structures in Canada’s major centres were: Vancouver ($1,237), Toronto ($1,149), Ottawa ($1,086), Calgary ($1,084), Victoria ($1,045), Edmonton ($1,034) and Barrie ($1,001). These are the only major centres with average rents at or above $1,000 per month. Provincially, the highest average monthly rents were in British Columbia ($1,050), Alberta ($1,044) and Ontario ($1,002).
The lowest average monthly rents for two-bedroom apartments in new and existing structures were: Trois-Rivières ($547), Saguenay ($557) and Sherbrooke ($577). On a provincial basis, the lowest monthly rents were: Québec ($684), New Brunswick ($687) and Newfoundland and Labrador ($701).
Year-over-year comparisons of average rents can be slightly misleading because rents in newly built structures tend to be higher than in existing buildings. Excluding new structures and focussing on structures existing in both the October 2010 and October 2011 surveys provides a better indication of actual rent increases paid by tenants. Overall, the average rent for two-bedroom apartments in existing structures across Canada’s 35 major centres increased 2.2 per cent between October 2010 and October 2011, slightly lower than what was observed between October 2009 and October 2010 (2.4 per cent).
CMHC’s fall Rental Market Survey also found that the rental apartment availability rate in Canada’s 35 major centres was 3.2 per cent in October 2011, down from 3.8 per cent in October 2010. A rental unit is considered available if the unit is vacant (physically unoccupied and ready for immediate rental), or if the existing tenant has given or received notice to move and a new tenant has not signed a lease. Availability rates were highest in Windsor (9.2 per cent), Abbotsford (7.5 per cent), Saint John (6.7 per cent) and Hamilton (6.2 per cent). The lowest rates were in Regina (0.9 per cent), Winnipeg (1.6 per cent) and Saguenay (1.7 per cent).
As Canada’s national housing agency, CMHC draws on more than 65 years of experience to help Canadians access a variety of high quality, environmentally sustainable and affordable housing solutions. CMHC also provides reliable, impartial and up-to-date housing market reports, analysis and knowledge to support and assist consumers and the housing industry in making informed decisions.
Okay, for those of you that’ don’t like statistics and prefer when I just post stories from my day-to-day life as a Realtor, then this clearly isn’t the blog you’ve been looking forward to!
But just consider the numbers for a moment. Vacancy is at a staggeringly-low 2.2% in Canada’s major centres.
Where else on the planet can you compete with that?
The overall vacancy rate in the United States (at the start of 2011 – sorry, but my Google-fu is weak…) was 11.4%.
Miami’s vacancy rate was 22.8%.
And what of our city – Toronto?
Vacancy rates are an unthinkable 1.4%.
When it comes to explaining high vacancy rates, experts always say the same thing,”You can only live in ONE home.” That’s precisely the problem! Many urban centres where over-building was rampant in the last few years have seen vacancy rates skyrocket! There has to be somebody to live in the property once it’s bought, built, and handed over to the owner. Speculators all over the United Stats got burned, and there has always been talk of this happening in Canada.
But with vacancy rates in Toronto at 1.4%, how ‘bad’ could things truly get?
It seems to me that the net migration of individuals into Toronto outstrips the amount of new condos being built – even if those condos are complete garbage like the CityPlace crap that’s going up and spreading towards Queen West.
But 1.4%? Talk to me, please. Tell me how if this number DOUBLED, we could still say, “There are too many condos in downtown Toronto.”
Believe me – my intention was not to write a feel-good, happy-go-lucky “the market is great, now is a great time to buy” type blog post. But when I see numbers like this, I have to feel good about my current real estate holdings and the value of my principal residence.
Just ask anybody who spent 2011 trying to rent a condo or an apartment how difficult things are.
I friend of mine spent every weekend out with his girlfriend looking at rentals, and half the time he would show up and the place would be leased! The other half of the time, prospective tenants would be mulling about the property with file-folders containing their employment letters and pay-stubs.
It’s not a kind rental market, and perhaps that’s why so many people bought properties in 2011.
So does that mean that if the rental market softens, the resale market will as well?
Is that even possible – both, that is?
Changes to Canadian mortgage rules have intended to weed out “the buyers that shouldn’t be buying,” and yet Toronto is still ripe with investors who have to make a minimum 20% downpayment when they buy a second property in their names.
And this month’s report on decreasing vacancy rates just goes to show that there seems to always be a renter waiting in the wings, hoping to see a “FOR LEASE” sign pop up, whether it’s your 1st, 2nd, 3rd, or 10th property…