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Signs for apartments available for rent in a building at 608 Church St. in Toronto on Jan. 28, 2021.

Fred Lum/The Globe and Mail

Canada’s apartment vacancy rate climbed during the pandemic, with job losses and a glut of new condos doubling vacancies in downtown Toronto, Montreal, Vancouver and Ottawa.

The national vacancy rate was 3.2 per cent in October of last year compared with 2 per cent in the same month in 2019, according to Canada Mortgage and Housing Corp.’s annual rental report released on Thursday.

The country’s biggest cities saw vacancies rise at a quicker pace, as some downtown workers lost their jobs and were unable to continue paying the rent. As well, border restrictions slowed immigration, downtown residents left to seek more room in the suburbs and postsecondary students no longer had to rent in the cities because their schools went virtual.

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At the same time, a flurry of newly built condos and apartments came on the market in Toronto, Vancouver and Montreal, and Airbnb owners turned their units into long-term rentals when tourism vanished. That increased supply as demand dwindled, leading to more vacancies in the downtown cores.

Vancouver renters eye incentives as vacancy rates continue to rise during the pandemic

In the Toronto region, the vacancy rate for apartments was 3.4 per cent in October after nearly a decade below 2 per cent. In the Montreal area, it was 2.7 per cent versus the prior year’s 1.1 per cent. The greater Vancouver area saw the rate jump to 2.6 per cent, from 1.1 per cent, and in the Ottawa-Gatineau area it was 3.9 per cent compared with 1.8 per cent. Alberta, which has shouldered two energy slumps in the past decade, had a 7.2 per cent vacancy rate with the two major cities of Edmonton and Calgary around the same level.

Downtown apartments had steeper vacancy rates than those in the surrounding suburbs as a record number of Torontonians and Montrealers fled the city in the early months of the pandemic.

“Vacancy rates rose sharply in large buildings in the city’s central areas, while the proportion of vacant units generally remained stable elsewhere in the metropolitan area,” Francis Cortellino, CMHC’s Montreal specialist said in the report.

In the city of Montreal, the vacancy rate was 3.2 per cent versus 1.2 per cent in the suburbs. In the city of Toronto, it was 5.8 per cent compared with 2.3 per cent in the suburbs. Although downtown Toronto typically has a higher vacancy rate compared with its surrounding suburbs, CMHC said the exodus of postsecondary students and job cuts in the services sector had an impact.

“A lot of this has been amplified with the job losses,” said Dana Senagama, CMHC’s senior specialist for the Toronto region.

It wasn’t just apartment properties that had fewer renters. Condo rentals also had more vacancies over prepandemic days. (Apartment units can only be rented. Condo units are owned by homeowners or investors. When condos are available for rent, CMHC considers them the secondary rental market. Most of the country’s census metropolitan areas – cities with a population of at least 100,000, of which 50,000 live in the core – had higher vacancy rates in the secondary market. Edmonton, Regina, Kelowna and Ottawa Gatineau were some of the exceptions.

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Although condo owners in Toronto slashed rent in an attempt to retain and attract renters, rent rose in the vast majority of the major urban centres in Canada, according to CMHC. Over all, the national average monthly rent for a two-bedroom rose to $1,165 from $1,113 the previous year.

CMHC suggested that job losses in low-paid industries like hospitality and services likely had an impact on renters falling behind in their rent. Across the country, the arrears rate was 6 per cent, with Ontario the highest among the provinces at 10 per cent. This was the first time CMHC measured the arrears rate. There was no rate for the previous year.

The migration to the suburbs, smaller cities and semi-rural areas has been reflected in the spike in home resales and real estate prices in areas like Muskoka in Ontario’s cottage country, the Okanagan in B.C. and the eastern townships in Quebec.

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