Rental vacancies tumbled to 1.9 per cent
January 31 2023
Despite a marked increase in rental supply in many of Canada’s largest cities, surging demand pushed the national vacancy rate for purpose-built rental apartments down from 3.1 per cent to 1.9 per cent in 2022, according to the latest Rental Market Report released by Canada Mortgage and Housing Corporation (CMHC).
This was lowest Canadian rental vacancy rate since 2001, reflecting widespread tightening across the country—including Montreal, Vancouver and Toronto—with Toronto reporting a particularly sharp decline.
The surge in rental housing demand reflected higher net migration and home ownership costs. Higher mortgage rates, which drove up already-elevated costs of home ownership, made it harder and less attractive for renters to transition to owning a home.
The overall average rent growth for two-bedroom purpose-built apartments common to 2021 and 2022 surveys was 5.6 per cent. This is a new annual high—well-above average rent growth recorded between 1990 and 2022.
Higher rent-growth for two-bedroom purpose-built units was widespread across Canada. New data published by CMHC indicates the average rent growth for two-bedroom units that turned over to a new tenant was well-above rent growth for units without tenant turnover.
For two-bedroom apartments, there was a 28 per cent difference between the average rent for new tenants ($1,235) and the average rent for existing tenants ($963). The change in average rent between 2021 and 2022 for two-bedroom apartments was 14.5 per cent for units with new tenants and 3.5 per cent for units with the same tenants.
While overall rental condo supply increased 7.2 per cent in 2022, the average vacancy rate for these units remained low at 1.6 per cent (compared to a 1.8 per cent gain 2021).