CMHC Survey: National vacancy rate increased in 2020

OTTAWA, ON, Jan. 28, 2021 /CNW/ - Among Canada's Census Metropolitan Areas (CMAs), the overall vacancy rate increased from 2.0% in 2019 to 3.2% in 2020 for all bedroom types, according to Canada Mortgage and Housing Corporation's (CMHC) Rental Market Survey (RMS) released today. The national average two-bedroom rent across CMAs increased by 3.6% to $1,165.

Bob Dugan, Chief Economist, CMHC (CNW Group/Canada Mortgage and Housing Corporation)

New this year, we have included rent arrears data. The COVID-19 pandemic has impacted renter households and rental markets across Canada. For apartment structures with rental arrears, 32.5% report their arrears rate to have remained similar to 2019, 58.3% reported a higher arrears rate and 9.2% report arrears are lower compared to 2019.

"The vacancy rate for purpose-built rental apartments in Canada's CMAs increased in 2020," said Bob Dugan, CMHC's chief economist. "The economic impact of the pandemic has significantly reduced rental demand. Lower international migration, fewer student renters and weaker employment conditions led to weaker inflows of new renters. While vacancy rates increased in many centres, we continue to see a need for more rental supply to ensure access to affordable housing."

CMHC conducts the RMS annually in October to gauge how socio-economic conditions, demographic trends and other factors impact Canada's rental markets. The survey is based on purpose-built structures with three or more rental units in urban areas with populations of more than 10,000. Additional key highlights are presented below. Further details on Canada's rental markets can be viewed in the 2020 comprehensive report and associated data tables.

We also survey the secondary rental condominium apartment market in major centres. We collect information on the number of condominium apartment units being rented out, vacancy rates and rents.

Highlights in vacancy rates for the purpose-built market

• The vacancy rate for Canada's three largest CMAs of Toronto, Montréal and Vancouver increased due to higher supply and lower demand.
  
  
• In British Columbia, vacancy rate increases were seen in Vancouver (2.6%) and Victoria (2.2%) while Kelowna's (2.1%) vacancy rate decreased.
  
  
• In Alberta and Manitoba, vacancy rates increased in Edmonton (7.2%), Calgary (6.6%), Lethbridge (5.6%) and Winnipeg (3.8%). In Saskatchewan, Regina (7.5%) and Saskatoon (5.9%) saw slight decreases in vacancy rate.
  
  
• In Toronto (3.4%), the vacancy rate increased due to the economic fallout of the COVID-19 pandemic. This led to the average vacancy rate in the Greater Toronto Area (GTA) reaching a 14-year high. This can also be explained by job losses in the service and hospitality sectors which tend to pay lower wages and employ younger workers - key characteristics of typical renter households.
  
  
• In Ontario, vacancy rates increased in Thunder Bay (4.1%), Ottawa (3.9%), Windsor (3.6%), London (3.4%), Kingston (3.2%), St. Catharines-Niagara (2.7%), Peterborough (2.6%) and Greater Sudbury (2.5%).
  
  
• Vacancy rates decreased in Hamilton (3.5%) and Barrie (2.1%). In Belleville (3.0%), Brantford (2.2%) and Guelph (2.2%), vacancy rates remained stable. No changes occurred in Kitchener-Cambridge-Waterloo (2.1%) and Oshawa (2.3%).
  
  
• Montréal's (2.7%) vacancy rate increased. A decrease in net international migration, the absence of in-person university courses because of COVID-19 and the return to the long-term rental market of tourist-oriented short-term rental units, all contributed to vacancy rate increases.
  
  
• Other Québec CMAs saw decreased rates – notably in Saguenay (2.8%), Sherbrooke (1.3%) and Trois-Rivières (1.3%).
  
  
• In Eastern Canada, St. John's (7.5%), Charlottetown (2.7%), Moncton (2.8%) and Halifax (1.9%) saw their vacancy rate increase while it remained stable in Saint John (3.1%).

Highlights in average rents for the purpose-built market

• Nationally, average rents across CMAs increased by 3.6% for a two-bedroom apartment between October 2019 and October 2020.
  
  
• The average rent for a two-bedroom apartment increased in Windsor (8.7%), Barrie (8.0%), Belleville (6.3%), London (6.8%), St. Catharines-Niagara (6.1%), Hamilton (5.0%), Guelph (4.8%), Peterborough (5.3%), Brantford (5.3%), Ottawa (5.2%), Moncton (4.7%), Oshawa (4.6%), Toronto (4.5%), Halifax (4.2%) and Kitchener-Cambridge-Waterloo (4.0%).
  
  
• The average two-bedroom apartment rent was highest in Vancouver ($1,792), Toronto ($1,635), Ottawa ($1,517), Victoria ($1,507), Barrie ($1,393), Kelowna ($1,391), Guelph ($1,356), Oshawa ($1,352), Kingston ($1,327), Calgary ($1,323), Edmonton ($1,272), Winnipeg ($1,262), and Halifax ($1,255).

Rent arrears increased nationally due to COVID-19

• Among Canada's CMAs, 6.11% or 116,929 apartment units were in arrears out of a total universe of 1,912,290 units. This represented approximately $150 million in total rent in arrears or 0.59% of total expected rent. This small proportion of rent (0.59%) relative to units (6.11%) suggests that primarily apartment units with lower rents were in arrears.
  
  
• The Toronto CMA recorded the highest rate of rent arrears (0.92%) in Canada with 10.68% of all units (34,858) reporting arrears. This represented $55 million in total rent in arrears. The pandemic disproportionately affected lower paid workers in the hospitality and service sectors. These numbers are reflective of a larger share of population in Toronto relative to the rest of Canada, with a greater concentration of workers in these industries.
  
  
• Among all provinces, Ontario posted the highest arrears rate in Canada, with 10.18% of apartment units and 0.81% of rent. This represented approximately $87 million in arrears as of October 2020.

Highlights for secondary rental condominium apartment market

• CMHC collects vacancy rate, rent and unit counts for rented condominium apartment units in 17 Canadian centres.
  
  
• The average vacancy rate for rental condominium apartments across surveyed centres increased from 1.0% from 1.5%.
  
  
• Victoria (0.3%), Hamilton (0.3%), London (0.3%), Ottawa (0.3%), Vancouver (0.6%), Kelowna (0.6%) and Halifax (0.9%) reported vacancy rates below the national average.
  
  
• Calgary (1.6%), Toronto (1.7%), Winnipeg (1.7%), Saskatoon (1.8%), Edmonton (2.0%) Montréal (2.0%), Québec (3.2%) and Regina (5.0%) reported vacancy rates above the national average.
  
  
• The national average two-bedroom condominium apartment rent increased to $1,663 from $1,577. Rates were highest in Toronto ($2,440), Victoria ($2,223), Vancouver ($2,058) and Hamilton ($1,947).

As Canada's housing market experts, CMHC supports decision making on housing affordability and contributes to the stability of housing markets. CMHC provides support for Canadians in housing need, and offers objective housing research and information to Canadian governments, consumers and the housing industry.

For more information, follow us on Twitter, YouTube, LinkedIn, Facebook and Instagram.

SOURCE Canada Mortgage and Housing Corporation

Angelina Ritacco, CMHC Media Relations, 416-218-3320, [email protected]

Related Links

www.cmhc-schl.gc.ca