CMHC: National Rental Vacancy Rate at Lowest level Since 2001

National vacancy rate is at its lowest level since 2001 finds the latest Rental Market Report released by Canada Mortgage and Housing Corporation (CMHC).

Rental Housing in Vancouver, British Columbia (CMHC) (CNW Group/Canada Mortgage and Housing Corporation)

According to the report, higher net migration, homeownership costs, and higher mortgage rates made it harder and less attractive for renters to transition to homeownership. This led to surging demand which pushed the national vacancy rate for purpose-built rental apartments down from 3.1% to 1.9% in 2022, even though overall rental condo supply increased by 7.2% in 2022.

The average rent increase was 5.6% for two-bedroom purpose-built apartments – a new annual high, well-above the average rent growth recorded between 1990 and 2022.

Average Rent Growth -Turnover vs Non-Turnover Units -Purpose-built Rentals

One of the most critical findings was that the increase in rent for two-bedroom units leased to a new tenant was 18.3% compared to without tenant turnover (2.9%).

Census Metropolitan Area (CMA)	Turnover Rate in 2022 (all purpose- built-units)	Turnover unit average rent increase (2 BDR)	Non-turnover unit average rent increase (2 BDR)
Canada	13.6 %	18.3 %	2.9 %
Vancouver	10.7 %	23.9 %	3.9 %
Victoria	15 %	*	2.6 %
Edmonton	30.4 %	1 %	1 %
Calgary	27.9 %	5.3 %	2.9 %
Regina	34.5 %	3.2 %	1.8 %
Saskatoon	33.1 %	3.1 %	1.9 %
Winnipeg	19.2 %	3.1 %	2.4 %
Hamilton	12.3 %	25.8 %	*
Windsor	12.7 %	27.7 %	1.7 %
KCW +	13.9 %	25.6 %	0.9 %
London	15.1 %	25.7 %	2.1 %
Kingston	19.2 %	21.6 %	*
Toronto	9.8 %	29.1 %	2.3 %
Ottawa	16.8 %	16.4 %	2.7 %
Gatineau	9.5 %	11 %	*
Montreal	10.3 %	14.5 %	3.5 %
Québec	15.4 %	8.2 %	3.4 %
Halifax	11.1 %	28.9 %	4.5 %

Canada Mortgage and Housing Corporation (CMHC) Rental Market Report Highlights:

CMHC report finds that the average rent for a 2-bedroom rental condominium apartment saw a significant increase to $1,930 from $1,771, about 9% year-over-year.

Vancouver was the leader (with 42.5% of its rental stock made up of condominiums), followed by Calgary (37.5%) and Toronto (34%). Centres in Quebec generally reported smaller shares, including Montréal at 6.7%.

The primary rental apartment vacancy rate in Toronto fell to 1.7% in 2022, from 4.4% the previous year. Fewer disruptions to economic activity and immigration in 2022 resulted in a surge in rental demand.
- - - Purpose Built Rental Market: Average Two-Bedroom Rent — $1,765
    - Condominium Apartment Market: Average Two-Bedroom Rent — $2,671
Strong demand in the Montreal rental market pushed the vacancy rate down from 3.7% in 2021 to 2.3% in 2022. Rent increases were also significant, especially for renters who moved.
- - - Purpose Built Rental Market: Average Two-Bedroom Rent — $1,022
    - Condominium Apartment Market: Average Two-Bedroom Rent — $1,517
In Vancouver, the vacancy rate decreased from 1.2% in 2021 to 0.9% in 2022. Higher homeownership costs and migration to the region led rental demand to increase faster than supply.
- - - Purpose Built Rental Market: Average Two-Bedroom Rent — $2,002
    - Condominium Apartment Market: Average Two-Bedroom Rent — $2,504
With Calgary‘s economy growing beyond pre-pandemic levels, the rental market tightened to conditions not seen since Alberta’s last economic boom. Overall vacancy rate dropped to 2.7% (from 5.1% in 2021), the lowest since 2014.
- - - Purpose Built Rental Market: Average Two-Bedroom Rent — $1,466
    - Condominium Apartment Market: Average Two-Bedroom Rent — $1,648
A strong economic rebound and record migration flows in Edmonton contributed to rental demand outpacing new rental supply in 2022. The purpose-built rental apartment vacancy rate was 4.3% in October 2022, down from 7.3% in October 2021.
- - - Purpose Built Rental Market: Average Two-Bedroom Rent — $1,304
    - Condominium Apartment Market: Average Two-Bedroom Rent — $1,426
In Ottawa, strong demographic and economic conditions supported rental demand and as a result, the vacancy rate dropped from 3.4% in 2021 to 2.1% in 2022. The greatest declines occurred in central neighbourhoods, partly because of the return of post-secondary students.
- - Purpose Built Rental Market: Average Two-Bedroom Rent — $1,625
  - Condominium Apartment Market: Average Two-Bedroom Rent — $2,075
Record high supply growth has helped alleviate rental market tightness, while rising demand has accelerated rent increases in the Victoria rental market. The vacancy rate rose slightly to reach 1.5 % (from 1 % in 2021), mostly from the expansion of the rental apartment stock.
- - Purpose Built Rental Market: Average Two-Bedroom Rent — $1,699
  - Condominium Apartment Market: Average Two-Bedroom Rent — $2,321
In Hamilton, the vacancy rate for purpose-built rental apartments was the lowest since 2002 at 1.9%. The number of occupied units increased due to more student renters, higher full-time employment and fewer renters transitioning into homeownership.
- - Purpose Built Rental Market: Average Two-Bedroom Rent — $1,438
  - Condominium Apartment Market: Average Two-Bedroom Rent — $2,083
The vacancy rate in Halifax did not change in 2022, staying at the record low of 1%. The number of rental apartment units increased by 1,348. This was the lowest number of annual rental completions since 2016.
- - Purpose Built Rental Market: Average Two-Bedroom Rent — $1,449

“Lower vacancy rates and rising rents were a common theme across Canada in 2022. This caused affordability challenges for renters, especially those in the lower income ranges, with very few units in the market available in their price range,” said Bob Dugan, CMHC’s chief economist in a news release.

The report is available here.