Renters surged back to Vancouver in the past year, as students, immigrants and arrivals from other provinces piled in during the second year of the pandemic, the latest annual report from Canada Mortgage and Housing Corp. shows.
As a result, Vancouver returned to its spot as the major Canadian city with the lowest vacancy rate (1.2 per cent in purpose-built rentals, 0.8 per cent for rented condos) and highest rents (up to $2,498 for a two-bedroom condo), while Toronto saw its vacancy rate increase and Montreal’s held relatively steady.
“Toronto’s vacancy actually increased to 4.4 per cent as people continued leaving the centre,” CMHC analyst Eric Bond said. The report notes that Toronto has probably lagged in returns because its pandemic restrictions lasted longer and, as a result, employment of young people stayed below prepandemic levels for more months than in other cities.
Smaller cities in B.C. such as Victoria and Kelowna also now have some of the lowest vacancy rates in Canada, lower even than Vancouver’s, after B.C. had record-high migration levels from other provinces and some of the country’s biggest jumps in population.
“It wasn’t clear what impact COVID would still have. But, in Vancouver, we’re seeing a return to where we were at in 2019,” said Jens von Bergmann, a Vancouver data scientist. He said Vancouver’s combination of jobs and amenities including parks, beaches and restaurants in its central-city area likely helped with the bounce back. “It’s a great city to live in in pandemic times.”
West End/downtown vacancy dropped from the 4 per cent it was in 2020 to 1.6 per cent last year.
That’s even though the region added 1,600 new purpose-built rental apartments and another 2,550 condos bought by investors and rented out.
Vancouver renters eye incentives as vacancy rates continue to rise during the pandemic
What all that means to housing analysts everywhere is that Canada as a whole, and places like Vancouver and Victoria in particular, is still in a housing crunch, where supply is barely keeping up with demand.
Only Toronto, Winnipeg and Abbotsford-Mission showed signs of having built more supply than local demand took up. Toronto, a metropolitan region of about six million, added 1,609 purpose-built rental units and 8,280 investor-held rental condos – about 37 per cent of the 22,380 condos completed overall in the past year. (Fewer condos were rented out than the usual 50 per cent, as more buyers chose to live in them.)
And the crunch is expected to get noticeably worse as Canada starts accepting a significantly bigger number of immigrants in the next few years, after it raised its quota levels to the highest they have been since 1913. The current plan is to accept 432,000 permanent residents in 2022 and 447,000 in 2023, well above the previous targets of about 300,000 a year.
“The persistently low vacancy rates confirms once again that supply is not meeting demand, and this situation will be further exacerbated as foreign students return and immigration expands,” said David Hutniak, chief executive officer of Landlord BC, an advocacy group for owners and managers of rental housing.
The CMHC report emphasizes that likelihood. “Net international migration remains well below pre-COVID levels. The first half of 2021 was 36 per cent lower than in the first half of 2019,” it said.
“This implies that net international migration is likely to continue to fuel growth in rental demand and place further downward pressure on vacancy rates, assuming migration continues to recover to pre-COVID levels.”
Rental reports for most cities highlighted the fact that nowhere near enough apartments and houses are available for low-income renters. The share of available apartments affordable to people making less than $42,000 a year in Victoria, for example, is almost zero.
In Vancouver, it would take 198 hours of work at the average wage in the city to rent a two-bedroom apartment at what is considered an affordable rate – paying no more than 30 per cent of income.
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