Looking to rent an apartment? Rental accommodations in Canada have been made a little easier this year, with more apartment buildings making their way onto the scene and fewer young adults finding themselves able to keep up with the tough job market. What does this mean for prospective renters? More units to choose from and less upward pressure on rents. Canada Mortgage and Housing Corporation (CMHC) surveyed Canada’s 35 major centres in order to present this year’s rental market conditions.
The following will give you some insight as to what the market is like for apartments this year and why.
Increased national rental vacancy rate
According to Canada Mortgage and Housing Corp., the average vacancy rate in Canada’s 35 major metropolitan areas rose to 2.6 per cent in October 2012 from 2.2 per cent in October 2011. Higher rental apartment completions in combination with a lessened demand from the under 25 age group have pushed Canada’s purpose-built rental apartment vacancy rate upward.
Young adults typically work less and make less. Full time employment rates amongst those in the 15 to 24 age group have dropped, and in turn household formation within this population is restrained. More and more young people are moving back in with their parents while they attend school or work part-time, which means less young people are able to afford making a permanent move out.
Vacancy rates did hold steady in most of Canada’s largest urban centres, including Toronto, Vancouver and Montreal.
Increased demand in secondary rental market
Despite the lowered employment rate amongst the under-25 group, there has been an increase in full-time employment among the over-25 age group- a likely contributing factor regarding increased demand in this market.
Monthly rents for two-bedroom condominium apartments are higher than monthly rents for two bedroom private apartments. Condominium units are typically newer and benefit from the appeal of amenities- in other words, they appeal to an older crowd consisting of individuals who are ready to live on their own, both mentally and financially.
Rents for two-bedroom apartments increased at the same rate as last year
The average rent for two-bedroom apartments in existing structures across Canada increased 2.2 per cent between October 2011 and October 2012. This was the same pace of rent increase recorded between October 2010 and October 2011. This low rate of rent increase is consistent with the low level of the vacancy rate.
The highest average monthly rents for two-bedroom apartments in Canada’s major centres were in Vancouver ($1,261), Toronto ($1,183) and Calgary ($1,150).
The lowest average monthly rents for two-bedroom apartments were in Saguenay ($549), Trois-Rivieres ($550) and Sherbrooke, Que., ($578).
What it all means
Thanks to prolonged adolescence for those under the age of 25 and an increased rate in full time employment for those over 25, there is a higher demand for condominium apartments, and more selection of newer units to choose from. Despite increased rental vacancy rates across the country, secondary rental market vacancy rates held steady. And of course, rental apartment demand is expected to strengthen here on out, a reflection of positive employment growth and strong net migration.