December 16th, 2009 
Money maker
Vacancy rates rose and rents increased in Canada’s apartment market in October, as weakness in youth employment and cheap mortgage rates took their toll on rental housing.
The average apartment rental vacancy rate for Canada’s 35 major centres rose to 2.8 per cent from 2.2. per cent, according to Canada Mortgage and Housing Corp. The average rent in all markets – excluding new buildings, whose higher rents can skew numbers – went up in all centres, with Regina seeing the biggest gain at 10.2 per cent.
“Demand for rental housing in Canada decreased due to slower growth in youth employment and improved affordability of home ownership options,” said Bob Dugan, chief economist at CMHC. “Rental construction and competition from the condominium market also added upward pressure on vacancy rates.”
From October 2008 to September 2009, 15,657 rental units and 45,655 condominium units were completed in the major centres, putting pressure on rentals.
Vacancy rates in October increased in eight out of 10 provinces. The largest increases were in Alberta, which saw a 3 percentage points increase to 5.5 per cent and British Columbia, where the vacancy rate rose by 1.8 percentage points to 2.8 per cent.
Vacancy rates decreased by 0.1 of a percentage point in Newfoundland and Labrador to 1 per cent, and by 0.4 of a percentage point in Nova Scotia to 3.1 per cent.
The centres with the highest vacancy rates in 2009 were Windsor (13 per cent), Abbotsford (6.1 per cent), Peterborough (6 per cent), Calgary (5.3 per cent), and London (5 per cent). The tightest markets were Regina (0.6 per cent), Québec (0.6 per cent), St. John’s (0.9 per cent), Winnipeg (1.1 per cent), Kingston (1.3 per cent), and Victoria (1.4 per cent).
The highest average monthly rents for two-bedroom apartments in new and existing structures were in Vancouver ($1,169), Calgary ($1,099), Toronto ($1,096), and Ottawa ($1,028). The lowest average monthly rents for two-bedroom apartments in new and existing structures were in Saguenay ($518), Trois-Rivières ($520), and Sherbrooke ($553).
