In most major markets across Canada, strong rental demand outpaced supply for the second year in a row, resulting in less available purpose-built rental apartments and lower affordability in Canada’s primary rental market, according to the latest Rental Market Report (RMR) released Wednesday by Canada Mortgage and Housing Corporation (CMHC).
The national vacancy rate for Canada’s primary rental market reached a new low of 1.5% in 2023, the lowest recorded rate since 1988, when CMHC began recording a national vacancy rate, said the federal agency.
Kevin Hughes
“Again in 2023, strong rental demand continued to outpace supply in communities across the country, making it very difficult for renters to find housing they can afford,” saidKevin Hughes, CMHC’s Deputy Chief Economist. “The vacancy rates and rent increases we are observing are further evidence the current level of rental supply in Canada is vastly insufficient and the need to increase this supply is urgent”.
The report said average rent growth for 2-bedroom purpose built rental units surveyed in both 2022 and 2023, referred to as “same-sample” rent growth, reached 8% in 2023, well above historical averages. Also, in 2023 and similar to 2022, the change in average rents in 2-bedroom “turnover” units far exceeded the change in rents in non-turnover units. A unit is counted as a “turnover” if it was occupied by a new tenant who moved in during the 12-month survey period.
“Although most Canadian cities saw increased rental supply, it was not enough to keep pace with increased demand pressures, caused mainly by high population and employment growth. Higher mortgage rates and persistently high home prices also continued to make it harder and less attractive for renters to transition to homeownership. As rental demand pushed up, the construction of new rental homes continued to be difficult for homebuilders facing higher costs for financing and construction materials, along with labour shortages,” said the CMHC.
The secondary rental market, or rented condominium market, also tightened in 2023. The average vacancy rate for rented condominiums in the 17 census metropolitan areas (CMAs) surveyed by CMHC fell to0.9% in 2023, down from 1.6% in 2022, added the report.
Along with a national overview the following CMAs have a dedicated section in the RMR:
Average Rent Growth -Turnover vs Non-Turnover Units (Purpose-Built Rentals)
|
Census Metropolitan
|
Turnover Rate in |
Turnover unit average |
Non-turnover unit |
|
Canada |
12.4% (a) |
24.1% (a) |
5.1% (a) |
|
Vancouver |
8.1% (a) |
33.5% (a) |
5.9% (b) |
|
Victoria |
15.7% (a) |
37.1% (a) |
3.7 % (d) |
|
Edmonton |
28.1% (a) |
6.6% (a) |
5% (b) |
|
Calgary |
23.6% (a) |
19.9% (a) |
10.9% (c) |
|
Regina |
31.9% (a) |
9.4% (b) |
6.1% (b) |
|
Saskatoon |
36.5% (a) |
10.7% (c) |
6.8% (b) |
|
Winnipeg |
19.2% (a) |
4.6% (c) |
3.3% (b) |
|
Hamilton |
11.1% (a) |
41.8% (a) |
7.6% (b) |
|
Windsor |
11.6% (a) |
~ |
~ |
|
KCW + |
14.7% (a) |
37% (a) |
2.4% (c) |
|
London |
14.4% (a) |
35.7% (a) |
2.7% (b) |
|
Kingston |
14% (a) |
~ |
3.1% (d) |
|
Toronto |
8.3% (a) |
40.4% (a) |
4.4% (b) |
|
Ottawa |
16.5% (a) |
19.7% (a) |
1.2% (d) |
|
Gatineau |
13.2% (c) |
~ |
~ |
|
Montréal |
9.6% (a) |
18.9% (a) |
5.7% (b) |
|
Québec |
14.9% (a) |
13% (c) |
3.9% (c) |
|
Halifax |
10.5% (a) |
22.7% (d) |
8.5% (b) |
Mario Toneguzzi
Mario Toneguzzi is Managing Editor of Canada’s Podcast. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list
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