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National Rental Vacancy Rate Stabilizes at 2.7 per Cent

OTTAWA, Ontario, December 15, 2005 — The average rental apartment vacancy rate in Canada's 28 major centres1 was unchanged at 2.7 per cent in October 2005 compared to last year, according to the Rental Market Survey released today by Canada Mortgage and Housing Corporation (CMHC). This follows three consecutive increases in the vacancy rate over the 2002 to 2004 period. The vacancy rate remains below the average of 2.8 per cent observed over the 1995 to 2004 period.

"Thanks to a solid economy and strong job creation, household formation has been healthy, which has promoted demand for both ownership and rental housing," said Bob Dugan, Chief Economist at CMHC's Market Analysis Centre. "The stabilizing of the vacancy rate across the major centres reflects a number of factors. As the majority of new immigrants initially settle in rental housing, high levels of immigration have been a key driver of rental demand over the past year. Also, across most centres, more renters are remaining in rental units as the gap between the cost of home ownership and renting increased in 2005. These two factors have put downward pressure on vacancy rates over the past year."

"On the other hand, home ownership demand remained very strong, which can be seen from the record level of existing home sales in 2005. Strong home ownership demand continues to apply upward pressure on vacancy rates. Adding to this is the high level of condominium completions in some centres. Condominiums are a relatively inexpensive form of housing that are often purchased by renter households switching to home ownership. In some cases, condos supplement the rental market as they may be purchased by investors who, in turn, rent them out. Therefore, high levels of condominium completions have created competition for the rental market and have put upward pressure on vacancy rates."

"Even though the average rental apartment vacancy rate has moved higher in recent years, many households are still facing affordability issues across Canada. Either these households need to move to less expensive units or require additional help to make their monthly shelter costs more affordable. In many cases, however, there are not enough vacant units to meet the needs of all households in core housing need. Therefore, additional affordable housing units continue to be required," said Bob Dugan.

The centres with the highest vacancy rates in 2005 were Windsor (10.3 per cent), Saint John (NB) (5.7 per cent), Saskatoon (4.6 per cent), Thunder Bay (4.6 per cent), Edmonton (4.5 per cent), St. John's (NFLD) (4.5 per cent), and Saguenay (4.5 per cent). On the other hand, the major urban centres with the lowest vacancy rates were Victoria (0.5 per cent), Sherbrooke (1.2 per cent), Québec (1.4 per cent), Vancouver (1.4 per cent), Trois-Rivières (1.5 per cent), Calgary (1.6 per cent), and Greater Sudbury (1.6 per cent).

In Ontario, vacancy rates were lower in six of 11 major centres. The rising cost of ownership and increasing immigration are largely responsible for boosting rental demand. These factors helped offset the drag on the rental market caused by rising condominium apartment completions. Windsor was the only major centre in Ontario that had an increase of more than one percentage point (1.5 percentage points to 10.3 per cent). On the other hand, the vacancy rate in Sudbury decreased by one percentage point to 1.6 per cent, while in Toronto the vacancy rate declined 0.6 percentage point to 3.7 per cent.

Vacancy rates went up in five of the six major centres in Quebec. The moderate increases in the vacancy rate across Quebec were due to the addition of new rental units and a less robust labour market in the youth and part-time labour segments, which limited household formation. However, sustained migration to and within the province increased rental demand. The greatest increase occurred in Gatineau (from 2.1 per cent to 3.1 per cent), while the vacancy rate in Montreal recorded a half percentage point increase to 2.0 per cent. Quebec saw an increase to its vacancy rate of 0.3 percentage point to 1.4 per cent. The only vacancy rate decline was reported in Saguenay with a 0.8 percentage point decrease to 4.5 per cent.

In the Prairies, three of five metropolitan areas had lower vacancy rates than in 2004. Strong net migration to the region, a rise in the cost of homeownership, and declines in the rental market universe are some of the factors that contributed to lower vacancy rates. The largest decreases were in Calgary where the vacancy rate fell by 2.7 percentage points to 1.6 per cent and in Saskatoon where the vacancy rate decreased by 1.7 percentage points to 4.6 percent. In Edmonton the vacancy rate declined from 5.7 per cent to 4.5 per cent.

Vacancy rates in British Columbia were up in two of the three major centres. However, increased employment opportunities attracted people to the resource-dependent areas of the province, stabilizing rental demand. Victoria remains the tightest metropolitan rental market in Canada as the vacancy rate fell by 0.1 percentage point to 0.5 per cent. In Vancouver, the vacancy rate increased slightly by 0.1 percentage point to 1.4 per cent, while the Abbotsford vacancy rate increased by 1.0 percentage point to 3.8 per cent.

Two of the three metropolitan centres in Atlantic Canada recorded vacancy rate increases with St. John's (NFLD) rising by 1.4 percentage points to 4.5 per cent. On the other hand, Saint John (NB) saw a slight drop in vacancy rates by 0.1 percentage point to 5.7 per cent. Slow employment growth reduced the influx of young households moving into the rental markets, while declining long-term mortgage rates have resulted in a greater outflow of tenants towards home ownership.

Average rents for two-bedroom apartments increased in 25 of the 28 major centres. However in 15 of the 25 major centres where rents were up, the increases were small. The greatest increases occurred in Kitchener, Victoria, and Quebec where rents were up 6.0 per cent, 4.8 per cent, and 4.2 per cent, respectively. Overall, the average rent for two-bedroom apartments across Canada's 28 major centres increased by 1.6 per cent in October 2005 compared to last year.

The highest average monthly rents for two-bedroom apartments were in Toronto ($1,052), Vancouver ($1,004), and Ottawa ($920), while the lowest were in Trois-Rivières ($474) and Saguenay ($472).

CMHC's Rental Market Survey found that the average rental apartment availability rate in Canada's 28 major centres remained at 3.9 per cent in October 2005, unchanged from a year ago. 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 (12.1 per cent), Hamilton (7.3 per cent), and Saint John (NB) (6.9 per cent), while the lowest rates were in Sherbrooke (1.4 per cent), and Victoria (1.5 per cent).

The Rental Market Survey results are based on the universe of row and apartment buildings with three or more units built specifically for rental purposes. CMHC is conducting survey pilots related to rental units not currently covered, such as rented condominiums, singles, duplexes, accessory apartments, etc. The potential coverage of this additional segment of the market within the Rental Market Survey will be considered in 2006.

CMHC's Rental Market Survey is conducted yearly in October, to provide vacancy rate and rent information on privately initiated apartment structures containing at least three rental units.

For further information contact:
Bob Dugan
CMHC
(613) 748-4009
bdugan@cmhc-schl.gc.ca

1Major centres are based on Statistics Canada Census Metropolitan Areas (CMAs) with the exception of the Ottawa – Gatineau CMA which is treated as two centres for Rental Market Survey purposes.

Vacancy Rates in Privately Initiated Apartment Structures of Three Units and Over in Metropolitan Areas

October
2001

October
2002

October
2003

October
2004

October
2005

Atlantic Region

St.John's

2.5

2.7

2.0

3.1

4.5

Halifax

2.8

2.7

2.3

2.9

3.3

Saint John

5.6

6.3

5.2

5.8

5.7

Quebec Region

Gatineau

0.6

0.5

1.2

2.1

3.1

Montréal

0.6

0.7

1.0

1.5

2.0

Québec

0.8

0.3

0.5

1.1

1.4

Saguenay

4.4

4.9

5.2

5.3

4.5

Sherbrooke

2.3

1.8

0.7

0.9

1.2

Trois-Rivières

4.7

3.0

1.5

1.2

1.5

Ontario Region

Hamilton

1.3

1.6

3.0

3.4

4.3

Kingston*

1.5

0.9

1.9

2.4

2.4

Kitchener

0.9

2.3

3.2

3.5

3.3

London

1.6

2.0

2.1

3.7

4.2

Oshawa

1.3

2.3

2.9

3.4

3.3

Ottawa

0.8

1.9

2.9

3.9

3.3

St.Catharines – Niagara

1.9

2.4

2.7

2.6

2.7

Greater Sudbury

5.7

5.1

3.6

2.6

1.6

Thunder Bay

5.8

4.7

3.3

5.0

4.6

Toronto

0.9

2.5

3.8

4.3

3.7

Windsor

2.9

3.9

4.3

8.8

10.3

Prairie Region

Calgary

1.2

2.9

4.4

4.3

1.6

Edmonton

0.9

1.7

3.4

5.3

4.5

Regina

2.1

1.9

2.1

2.7

3.2

Saskatoon

2.9

3.7

4.5

6.3

4.6

Winnipeg

1.4

1.2

1.3

1.1

1.7

British Columbia Region

Abbotsford*

2.4

2.0

2.5

2.8

3.8

Vancouver

1.0

1.4

2.0

1.3

1.4

Victoria

0.5

1.5

1.1

0.6

0.5

Total (1)

1.1

1.7

2.2

2.7

2.7

(1) Weighted average of metropolitan areas surveyed does not include the newly created Abbotsford and Kingston CMAs prior to 2002.
* Data prior to 2002 is based on the census agglomeration definition; 2002, 2003 and 2004 data is based on the census metropolitan area definition.

Average Rents in Privately Initiated Apartment Structures of Three Units And Over in Metropolitan Areas

One-Bedroom

Two-Bedroom

Oct. 2004

Oct. 2005

Oct. 2004

Oct. 2005

Atlantic Region

$

$

$

$

St.John's

521

539

618

634

Halifax

612

626

747

762

Saint John

432

441

520

526

Quebec Region

Gatineau

557

562

663

660

Montréal

539

562

594

616

Québec

523

536

596

621

Saguenay

377

385

459

472

Sherbrooke

392

407

495

505

Trois-Rivières

389

403

457

474

Ontario Region

Hamilton

641

646

789

791

Kingston

646

660

785

807

Kitchener

651

677

765

811

London

602

620

758

775

Oshawa

750

753

852

855

Ottawa

771

762

940

920

St.Catharines – Niagara

611

624

722

736

Greater Sudbury

529

544

655

668

Thunder Bay

550

556

679

689

Toronto

886

888

1,052

1,052

Windsor

650

650

776

780

Prairie Region

Calgary

655

666

806

808

Edmonton

597

608

730

732

Regina

503

505

602

607

Saskatoon

472

477

580

584

Winnipeg

519

539

664

683

British Columbia Region

Abbotsford

546

560

684

704

Vancouver

774

788

984

1,004

Victoria

630

657

799

837

Vacancy and Availability Rates in Privately Initiated Apartment Structures of Three Units and Over in Metropolitan Areas

Vacancy
Rate

Availability
Rate

October
2005

October
2005

Atlantic Region

St.John's

4.5

5.9

Halifax

3.3

4.1

Saint John

5.7

6.9

Quebec Region

Gatineau

3.1

3.2

Montréal

2.0

2.5

Québec

1.4

1.6

Saguenay

4.5

5.0

Sherbrooke

1.2

1.4

Trois-Rivières

1.5

1.6

Ontario Region

Hamilton

4.3

7.3

Kingston

2.4

3.9

Kitchener

3.3

6.0

London

4.2

6.7

Oshawa

3.3

4.8

Ottawa

3.3

5.6

St.Catharines – Niagara

2.7

4.6

Greater Sudbury

1.6

3.8

Thunder Bay

4.6

5.8

Toronto

3.7

5.6

Windsor

10.3

12.1

Prairie Region

Calgary

1.6

3.4

Edmonton

4.5

5.7

Regina

3.2

4.9

Saskatoon

4.6

6.7

Winnipeg

1.7

2.5

British Columbia Region

Abbotsford

3.8

4.6

Vancouver

1.4

2.7

Victoria

0.5

1.5

Total (1)

2.7

3.9

(1) Weighted average of metropolitan areas surveyed

Availability Rates in Privately Initiated Apartment Structures of Three Units and Over in Metropolitan Areas

Availability
Rate

Availability
Rate

October
2004

October
2005

Atlantic Region

St.John's

4.5

5.9

Halifax

3.9

4.1

Saint John

7.3

6.9

Quebec Region

Gatineau

2.6

3.2

Montréal

1.9

2.5

Québec

1.5

1.6

Saguenay

NA

5.0

Sherbrooke

1.5

1.4

Trois-Rivières

1.6

1.6

Ontario Region

Hamilton

5.4

7.3

Kingston

4.3

3.9

Kitchener

6.3

6.0

London

5.9

6.7

Oshawa

4.4

4.8

Ottawa

6.7

5.6

St.Catharines – Niagara

4.4

4.6

Greater Sudbury

4.4

3.8

Thunder Bay

7.9

5.8

Toronto

6.2

5.6

Windsor

10.4

12.1

Prairie Region

Calgary

6.2

3.4

Edmonton

6.9

5.7

Regina

4.4

4.9

Saskatoon

8.5

6.7

Winnipeg

1.8

2.5

British Columbia Region

Abbotsford

4.0

4.6

Vancouver

2.3

2.7

Victoria

1.9

1.5

Total (1)

3.9

3.9

(1) Weighted average of metropolitan areas surveyed