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Rental Vacancy Rate Inches Down
The average rental apartment vacancy rate in Canada's 28 major centres decreased slightly by 0.1 of a percentage point to 2.6% in October 2006 compared to last year, according to the Rental Market Survey released today by Canada Mortgage and Housing Corporation (CMHC).
"Solid job creation and healthy income gains helped to strengthen demand for both ownership and rental housing," said Bob Dugan, Chief Economist at CMHC's Market Analysis Centre. "High levels of immigration were a key driver of rental demand in 2006, as was the increasing gap between the cost of home ownership and renting. These factors have put downward pressure on vacancy rates over the past year."
"However near record levels of existing home sales and the high level of housing starts in 2006 show that home ownership demand remained very strong, and it 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 type of housing for renters moving to home ownership. Also, some condominium apartments are owned by investors who rent them out. Therefore, high levels of condominium completions have created competition for the rental market and have put upward pressure on vacancy rates.
The centres with the highest vacancy rates in 2006 were Windsor (10.4 per cent), Saint John (NB) (6.8 per cent), and St. John’s (NFLD) (5.1 per cent). On the other hand, the major urban centres with the lowest vacancy rates were Calgary (0.5 per cent), Victoria (0.5 per cent), and Vancouver (0.7 per cent).
In Ontario, vacancy rates were lower in five of 11 major centres and unchanged in two. The rising cost of homeownership, high immigration, and improved job prospects for youth were largely responsible for boosting rental demand across the province. These factors helped offset upward pressures on vacancies triggered by higher condominium and rental apartment completions. The vacancy rate in Ottawa decreased by one percentage point to 2.3 per cent, while in Toronto the vacancy rate declined 0.5 of a percentage point to 3.2 per cent.
December 15, 2006 in Toronto Real Estate Update | Permalink
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