Average vacancy rate decreases 0.2% to 2.2% —
Governments need to make the tax and development climate better for rentals
According to CMHC, the average rental vacancy rate in major centres across Canada decreased from 2.4% in October 2018 to 2.2% in October 2019. Vacancy rates generally declined in the Maritimes, Quebec, Alberta, and Saskatchewan, while increasing by modest amounts in centres in Newfoundland, most of Ontario and most of British Columbia.
CFAA President, John Dickie, says, “Despite low vacancy rates, the turnover rates show that there is adequate access to rental housing in some form in almost all centres, but more rental housing supply is needed urgently in some areas, especially in Greater Toronto and Greater Vancouver. In those centres, turnover rates are lower than in most of Canada, and fell slightly from 2018 to 2019.”
Turnover rates (Centres 10,000 and up)
New rental supply in many centres
In many centres, new purpose-built rental housing has come on stream. However, rental construction still did not quite keep up with the increase in demand between October 2018 and October 2019, and did not reduce the rental shortages in most major centres.
In addition, many new and existing condominiums were added to the rental supply. For example, in Vancouver, 69,967 condos were rented or available for rent in September 2019, whereas the equivalent number for 2018 was 58,849, an increase of 19% in that part of the rental supply.
Condos have become a significant source of rental supply, and that stock is expanding. In Ontario and the West, between 22% and 37% of all condos in most centres are rented to tenants, consistent with last year. The proportions of all condos rented in major centres in October 2019 are: Ottawa 30%, London 33%, Toronto 34%, Winnipeg 20%, Calgary 38%, Edmonton 39% and Vancouver 28%.
The secondary rental market vs purpose-built rentals
While the secondary rental supply is keeping us all away from disaster, the more secure and better long-term solution is for governments to make the tax environment better for rental operations and development, in order to enable the private sector to build more purpose-built rentals. Governments certainly need to avoid increasing taxes on rental housing. Governments also need to make planning approvals less slow and less uncertain.
As rental demand grows, more rental supply is needed, and particularly more purpose-built rental supply. CFAA Chair, Geoff Younghusband, says, “The federal government needs to look seriously at its tax policy for rental buildings, while the provinces and cities need to look hard at development charges, delays in planning approvals and rent control restrictions. Those are the most important factors holding back much-needed purpose-built rental supply.”
For more information, contact: John Dickie, President, CFAA, at 613-235-0101, or by e-mail at firstname.lastname@example.org.