CMHC SPRING 2011 RENTAL MARKET SURVEY

CMHC SPRING 2011 RENTAL MARKET SURVEY

MONTRÉAL, June 9 2011 – According to the Rental Market Survey conducted in the spring by Canada Mortgage and Housing Corporation (CMHC), the average vacancy rate in privately initiated structures with three or more housing units in Quebec’s urban centres (with 10,000 or more inhabitants) reached 2.4 per cent in April. The 0.1 per cent decrease from the same period last year was evidently not statistically significant.

This result was largely due to the influence of the Montréal Census Metropolitan Area CMA - with a universe accounting for two thirds of the rental housing stock in the province – but also to the other of the province’s regions. As well, the survey results did not reveal large changes at the CMA level. For the other urban agglomerations, the results show an almost identical rate (2.5 per cent) in centres with 10,000 to 49,999 inhabitants and a rate of 2.9 per cent in the case of agglomerations with 50,000 to 99,999 inhabitants (see table).

“The picture of the market according to apartment size was fairly uniform across the province and had not changed much for several years, as the market was still tighter in the case of larger apartments. In fact, the vacancy rates were

significantly lower for two-bedroom and three-bedroom apartments (2.0 per cent and 1.4 per cent, respectively) than for bachelor units (5.9 per cent). Moreover, their rates have not significantly changed from last spring,” stated Kevin Hughes, Regional Economist at CMHC.

The estimated change in the average rent in existing structures did not change notably. It was measured at 2.3 per cent when compared to 2010. However, the availability rate (4.7 per cent) declined since last spring. Among the factors that contributed to the tightening of the market, two are noteworthy: the relatively strength of the job market for young people and a slower movement to

homeownership.

“Overall, certain factors caused rental market conditions to ease, while others acted in the opposite direction. For one thing, supply remained weak. As for demand, the combined effect of growing youth employment and of less strong move to homeownership was compensated by a drop in net migration.

And so, as in the recent past – but for different reasons, the spring 2010 survey results reflected offsetting factors, which, in the end, did not bring forth any change,” added Kevin Hughes.

The vacancy rate remained stable in 2011 in the Montréal CMA (2.5 per cent). Like the provincial profile, smaller dwellings were apparently less popular. Indeed, the vacancy rate is significantly higher in bachelor units (6.2 per cent) than in other types of apartments. The vacancy rate reached 2.5 per cent in one-bedroom apartments, 1.9 per cent in two-bedroom apartments and 1.0 per cent in the apartments of three bedrooms and more. The vacancy rate in the apartments of two rooms was not significantly different from the apartments of three bedrooms. The dynamics that influenced the results for the CMA are similar to those discussed for the entire province. While it remains the tightest of major centers in the province, the rental market in the Québec CMA has eased when compared to the spring of 2010. The vacancy rate was 1.0 per cent in April,

compared to 0.4 per cent from the same period last year. This result still shows a relatively high demand owing to, among other things, a still active labour market. The recent market conditions have caused an estimated change of 2.6 per cent of the average rent. According to the survey, the average rent for a dwelling was $694 last April.

Despite registering a vacancy rate below that posted in the spring of 2010 (2.2 per cent against 2.8 per cent in 2010), the margin of statistical variation associated with the region of Gatineau does not establish a tightening rental market in April 2011. Moreover, there are no significant differences when breaking down this result by apartment size. The spring survey in 2011 reported an availability rate of 3.5 per cent and an average rent of $695. The Quebec part of the Ottawa-Gatineau CMA has a universe of less than 20,000 dwellings (compared to nearly 73,000 for the Québec CMA and has about 32,000 the Sherbrooke region)

The stability of the vacancy rate in the Sherbrooke area (3.7 per cent) reflects growth of both supply and demand over the past year. On the supply side, there has been a slight increase in rental apartments in the area. On the demand side, several factors have influenced the rental market, including a slowdown in home ownership, the recent increases in youth employment since the last recession. An important element that helped sustain the demand for rental units is the high net migration into the area, especially immigration. For all sizes of accommodation, the difference between the vacancy rate in 2010 and 2011 are not statistically significant.

Registering a vacancy rate of 4.2 per cent (compared to 2.5 per cent last spring), the rental Trois- Rivières rental market was definitely less tight this spring. This comes in the wake of the easing movement which began in 2009. Unlike many large centres, a significant rental housing supply contributed to this result. The breakdown of the latest result indicates a significant relaxation in the category of two bedroom flats, by far the largest market segment. The region is also unique in having no significant differences in vacancy rates by size of dwelling.

Like the province, the result posted by the Saguenay region is unchanged from last year. Overall, the vacancy rate is 1.9 per cent. According to survey results, the two- and three-bedroom segments were apparently the tightest in the region. The average rent of $517 is not significantly different form that recorded last spring. As for the availability rate, it decreased significantly, going from 9.5 per cent to 5.2 per cent this spring.