While the percentage of available units within Canada's primary rental market remained virtually the same in 2021 compared to the year before, there are still concerns that vacancy rates in key markets across the country could see a decline come next year. This could result in less affordability among Canada's rental units.
by the Canada Mortgage and Housing Corporation , Canada’s purpose-built rental market had a vacancy rate of 3.1 per cent in 2021, a slight drop compared to the overall vacancy rate in 2020 of 3.2 per cent. The average rent for a two-bedroom apartment unit in Canada was $1,167 in 2021, representing an increase of three per cent compared to the year before.
In 2021, the country saw a rise in the demand for these rental units compared to the year before, said Dugan, partially due to a recovery in international migration levels as a result of relaxed travel restrictions. Based on data from Immigration, Refugee and Citizenship Canada, the country welcomedThe lifting of pandemic-related restrictions on a regional level also contributed to economic recovery through increased employment of young Canadians, said Dugan.
As more pandemic-related restrictions are lifted in British Columbia, Davidoff said he anticipates this latest trend will continue in Vancouver, with more tenants seeking to rent apartments located in the city’s downtown core. Demand for these units will create additional pressure within the city’s purpose-built rental market, he said.
While the COVID-19 pandemic has no doubt had an impact on residents of Toronto as well, certain segments of the population seem to have taken longer to bounce back from pandemic measures financially, according to the CMHC report. This, along with greater rental stock among condominium apartments, has resulted in an increased vacancy rate among purpose-built units in the city seen today, said Mercer. According to the CMHC, the Greater Toronto Area saw seven times more condominium apartments enter its long-term rental market in 2021 compared to purpose-built apartments.
Michael Froese, managing broker of Royal LePage Prime Real Estate based in Winnipeg, said he has been seeing this growth in supply first hand, with a new apartment complex being built near his home. Other high-rise apartment buildings are being developed in the city’s downtown core and suburban Winnipeg as well, he said.
Despite these increases in rent prices, both cities saw growth rates slow down compared to previous years. In Toronto, when comparing rents for similar units between October 2020 and October 2021, average apartment rents increased by 1.3 per cent in 2021. This is significantly lower than the increase recorded in 2020 of 4.7 per cent. In Winnipeg, same-sample apartment rents increased by 2.6 per cent in 2021, but this figure has been decreasing steadily since 2018.
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