“While vacancy numbers have climbed over the last several months, there is optimism that the numbers will begin to steadily decline,” said Jamie McDougald, President, Saskatchewan Landlord Association. “The approval of the Keystone XL Pipeline has stimulated the oil sector and the tempered construction of new apartments will serve to moderate supply levels.”
Manitoba At 2.8 per cent, Manitoba and Winnipeg have a lower vacancy rate for purposebuilt apartments than the national average. This is down slightly from the previous year, but significantly higher than years past, when it was at or below 1.5 per cent. There has been little change in the number of occupied rental apartment units year to year, as weaker employment conditions offset higher net international migration. “We believe that the vacancy rate will be going up – we will be getting colder – for the next year or two,” said Avrom Charach, Vice President, Kay Four Properties (and spokesperson for member of the Professional Property Managers Association of Manitoba). “This is tied to a small amount of new developments coupled with low mortgage rates.” Turnover rates in Manitoba were above the national average. Winnipeg’s condominium apartment rental rate is 1.8 per cent, which is lower than the purpose-built rental vacancy rate. According to the CMHC, about 18 per cent of condominium apartments are made available for rent in Winnipeg. “With Winnipeg’s reasonably affordable purchase prices for condos and homes, people are moving toward ownership right now,” said Charach. “I believe that the drop in condo rates is due to low mortgage rates. I only see this changing when mortgage rates go up.”
Greater Toronto Area and Southern Ontario Many factors contribute to the decrease in purpose-built rental vacancy rates in the Greater Toronto Area (GTA) and Southern Ontario. These include the improving economy, the rising cost gap between owning and renting, and increasing international migration. Demand is outstripping supply, particularly in the GTA, London and Ottawa. Weaker job market prospects for youth are exerting upward pressure on vacancy rates. However, the rising cost of home ownership is keeping people in rental housing. “An improving provincial economy, eroding ownership affordability and rising international migration drove the Ontario vacancy rate to the lowest level since 2001,” said Ted Tsiakopoulos, Ontario Economist, CMHC.
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The GTA has seen an increase of 35 per cent in the new primary rental supply completed over the last 12 months, although that has not pushed vacancy rates higher. Increased completion of rental units were mostly offset by the removal of existing units from the market through demolitions, renovations and conversions to ownership. There has been a significant increase in the number of rental units under construction (40 per cent), as well as increasing demand for newer rental buildings with modern amenities.
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“Rental housing is becoming an increasingly popular housing option for many people, including those new to the workforce,” said Jim Murphy, President and CEO, FRPO. “We have seen significant investments by apartment owners and property managers to existing rental buildings, making them more attractive to potential renters.”
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The GTA’s red-hot condominium construction trend has slowed significantly, as completions declined by 37 percent from the previous year’s all-time high. The proportion of newly completed units that were offered for rent reached 50.3 per cent in 2016, which was slightly lower than the previous year. Low vacancy rates have encouraged existing condominium apartment owners to lease their properties. “CMHC estimates that 30 per cent of condominium units are investor owned, the majority of which are in the rental market,” said Murphy. “Condominiums have played an important role in the overall housing market by providing literally hundreds of thousands of units for rent since the early 1990s.”