According to the results of the Rental Market Survey conducted by Canada Mortgage and Housing Corporation (CMHC), the overall vacancy rate for Quebec’s urban centres rose slightly this year, edging up to 2.7 per cent in October 2010, compared to 2.4 per cent a year earlier. This small change mirrored the conditions observed in most major centres of the province. According to the survey results, Quebec’s six census metropolitan areas (CMAs) registered increases in their vacancy rates, but the results were statistically significant in only three cases (Québec, Trois-Rivières and Sherbrooke).
Supply and demand remain stable
“The small change in the vacancy rate in Quebec reflected the stable rental housing supply and demand during the past twelve months. In fact, supply remained generally
stagnant over the past year. Investors still prefer the more profitable condominium and retirement home segments,” said Kevin Hughes, Regional Economist at CMHC for Quebec.
“Rental housing demand, for its part, also remained unchanged this year. However, this was likely due to two phenomena with opposing effects: the movement to homeownership and the formation of renter households. On the one hand, the economic recovery and favourable financing conditions accelerated the movement to homeownership and, in so doing, reduced demand for rental housing. On the other hand, over the same period, strong net migration and job creation among young people encouraged the formation of renter households,” added Kevin Hughes.
Conditions ease slightly for large apartments
For several years, signs of a stronger demand for larger units had been observed on the Quebec market. This was associated with a boom in net migration and a slowdown in the movement to homeownership. This year, the survey results reflected the same phenomenon, but to a lesser extent, as the movement to homeownership picked up somewhat and immigration slowed down. A marginal easing of market conditions in the larger apartment category was observed, such that the vacancy rate gap between bachelor units and three-bedroom apartments narrowed slightly.
Rents
The average rent for all Quebec urban centres reached $648 in October this year. The
averages were $504 for bachelor apartments and $783 for three-bedroom units. When excluding new structures, it is estimated that, since October 2009, the average rent in Quebec has risen by about 3 per cent. The estimated changes in rents varied between 2.1 per cent and 2.7 per cent in the CMAs.
CMHC’s affordability indicator
CMHC’s affordability indicator remained relatively stable this fall but did decrease in the Saguenay, Trois-Rivières and Montréal CMAs. Still, Quebec’s major urban centres continued to have the most affordable rental markets in the country. However, others have joined them. In Alberta, in fact, the rental markets in Calgary and Edmonton have now reached levels comparable to those of Quebec’s major centres.
Rental condominiums
According to the Secondary Rental Market Survey results, about 9.4 per cent (10,081 units) of the condominiums in the Montréal CMA were rental units in October 2010, while the proportion was 8.1 per cent (1,766 units) in the Québec CMA. In the Montréal area, the vacancy rate for dwellings of this type rose from 2.7 per cent last year to 4.2 per cent this year. This increase was due to the rise in the supply of rental condominiums and also to the impact of the movement to homeownership. Less tight than the traditional rental market, the rental condominium market remained stable (with a vacancy rate of 1.7 per cent) in the Québec CMA.
“As for the differences in rents between rental condominiums and traditional rental housing units, two facts are noteworthy: first, this gap was generally wider in the Montréal CMA (65 per cent) than in the Québec CMA (34 per cent) and, second, in Montréal, this gap was widest for two-bedroom apartments (63 per cent, compared to 59 per cent for one-bedroom apartments and 55 per cent for three-bedroom units),” concluded Mr. Hughes.
Around the province
Although up slightly in the province overall, the vacancy rate remained relatively stable in the Montréal CMA. In fact, the vacancy rate there edged up by just two tenths of a point, reaching 2.7 per cent in October 2010. This result reflected a stable demand and supply.
On the demand side, the favourable economic and demographic conditions gave rise to dynamics that offset each other in the end: a strong movement to homeownership and the formation of renter households. On the supply side, there have been few rental housing starts in recent years. The estimated change in the rents charged in existing structures between October 2009 and October 2010 reached an average of 3.4 per cent.
The rental market eased slightly in the Québec CMA, as the vacancy rate rose from 0.6 per cent in October 2009 to 1.0 per cent this past October. The increase in supply between the last two surveys and the movement to homeownership contributed to this result. Despite this increase, the area still had the tightest rental market in the province.
The easing was more notable in the case of bachelor apartments. And, the estimated
change in the average rent was 2.3 per cent.
No significant change was observed in the Quebec part of the Ottawa-Gatineau CMA, where the vacancy rate reached 2.5 per cent in October 2010. The small year-over-year change resulted from two opposing key factors: the continued homeownership trend and the strong migration to the area. As a result, the estimated change in the average rent remained stable this fall (+2.1 per cent).
In the Sherbrooke CMA, the rental market further eased this fall. The vacancy rate, estimated at 4.6 per cent in October 2010, was among the highest in the province’s major centres. As in recent years, the vacancy rate increase recorded in the Sherbrooke CMA in 2010 resulted mainly from a slowdown in demand for rental housing. Supply, for its part, rose by only 1 per cent between the last two surveys.
An abundant supply of new units and a decline in demand contributed to the easing of the rental market in the Trois-Rivières CMA. In fact, the vacancy rate there reached 3.9 per cent in October 2010, compared to 2.7 per cent a year earlier. While migration was still strong, the steady pace of construction caused supply to rise faster than demand. The estimated change in the average rent for two-bedroom apartments attained 2.4 per cent.
In the Saguenay area, market conditions remained stable in October 2010, compared to October 2009. The estimated vacancy rate reached 1.8 per cent. This stability reflected the concurrent increase in supply and demand in the area. The estimated change in the average rent for units contained in existing structures reached 2.4 per cent between the October 2009 and October 2010 surveys.
Supply and demand remain stable
“The small change in the vacancy rate in Quebec reflected the stable rental housing supply and demand during the past twelve months. In fact, supply remained generally
stagnant over the past year. Investors still prefer the more profitable condominium and retirement home segments,” said Kevin Hughes, Regional Economist at CMHC for Quebec.
“Rental housing demand, for its part, also remained unchanged this year. However, this was likely due to two phenomena with opposing effects: the movement to homeownership and the formation of renter households. On the one hand, the economic recovery and favourable financing conditions accelerated the movement to homeownership and, in so doing, reduced demand for rental housing. On the other hand, over the same period, strong net migration and job creation among young people encouraged the formation of renter households,” added Kevin Hughes.
Conditions ease slightly for large apartments
For several years, signs of a stronger demand for larger units had been observed on the Quebec market. This was associated with a boom in net migration and a slowdown in the movement to homeownership. This year, the survey results reflected the same phenomenon, but to a lesser extent, as the movement to homeownership picked up somewhat and immigration slowed down. A marginal easing of market conditions in the larger apartment category was observed, such that the vacancy rate gap between bachelor units and three-bedroom apartments narrowed slightly.
Rents
The average rent for all Quebec urban centres reached $648 in October this year. The
averages were $504 for bachelor apartments and $783 for three-bedroom units. When excluding new structures, it is estimated that, since October 2009, the average rent in Quebec has risen by about 3 per cent. The estimated changes in rents varied between 2.1 per cent and 2.7 per cent in the CMAs.
CMHC’s affordability indicator
CMHC’s affordability indicator remained relatively stable this fall but did decrease in the Saguenay, Trois-Rivières and Montréal CMAs. Still, Quebec’s major urban centres continued to have the most affordable rental markets in the country. However, others have joined them. In Alberta, in fact, the rental markets in Calgary and Edmonton have now reached levels comparable to those of Quebec’s major centres.
Rental condominiums
According to the Secondary Rental Market Survey results, about 9.4 per cent (10,081 units) of the condominiums in the Montréal CMA were rental units in October 2010, while the proportion was 8.1 per cent (1,766 units) in the Québec CMA. In the Montréal area, the vacancy rate for dwellings of this type rose from 2.7 per cent last year to 4.2 per cent this year. This increase was due to the rise in the supply of rental condominiums and also to the impact of the movement to homeownership. Less tight than the traditional rental market, the rental condominium market remained stable (with a vacancy rate of 1.7 per cent) in the Québec CMA.
“As for the differences in rents between rental condominiums and traditional rental housing units, two facts are noteworthy: first, this gap was generally wider in the Montréal CMA (65 per cent) than in the Québec CMA (34 per cent) and, second, in Montréal, this gap was widest for two-bedroom apartments (63 per cent, compared to 59 per cent for one-bedroom apartments and 55 per cent for three-bedroom units),” concluded Mr. Hughes.
Around the province
Although up slightly in the province overall, the vacancy rate remained relatively stable in the Montréal CMA. In fact, the vacancy rate there edged up by just two tenths of a point, reaching 2.7 per cent in October 2010. This result reflected a stable demand and supply.
On the demand side, the favourable economic and demographic conditions gave rise to dynamics that offset each other in the end: a strong movement to homeownership and the formation of renter households. On the supply side, there have been few rental housing starts in recent years. The estimated change in the rents charged in existing structures between October 2009 and October 2010 reached an average of 3.4 per cent.
The rental market eased slightly in the Québec CMA, as the vacancy rate rose from 0.6 per cent in October 2009 to 1.0 per cent this past October. The increase in supply between the last two surveys and the movement to homeownership contributed to this result. Despite this increase, the area still had the tightest rental market in the province.
The easing was more notable in the case of bachelor apartments. And, the estimated
change in the average rent was 2.3 per cent.
No significant change was observed in the Quebec part of the Ottawa-Gatineau CMA, where the vacancy rate reached 2.5 per cent in October 2010. The small year-over-year change resulted from two opposing key factors: the continued homeownership trend and the strong migration to the area. As a result, the estimated change in the average rent remained stable this fall (+2.1 per cent).
In the Sherbrooke CMA, the rental market further eased this fall. The vacancy rate, estimated at 4.6 per cent in October 2010, was among the highest in the province’s major centres. As in recent years, the vacancy rate increase recorded in the Sherbrooke CMA in 2010 resulted mainly from a slowdown in demand for rental housing. Supply, for its part, rose by only 1 per cent between the last two surveys.
An abundant supply of new units and a decline in demand contributed to the easing of the rental market in the Trois-Rivières CMA. In fact, the vacancy rate there reached 3.9 per cent in October 2010, compared to 2.7 per cent a year earlier. While migration was still strong, the steady pace of construction caused supply to rise faster than demand. The estimated change in the average rent for two-bedroom apartments attained 2.4 per cent.
In the Saguenay area, market conditions remained stable in October 2010, compared to October 2009. The estimated vacancy rate reached 1.8 per cent. This stability reflected the concurrent increase in supply and demand in the area. The estimated change in the average rent for units contained in existing structures reached 2.4 per cent between the October 2009 and October 2010 surveys.