CHANGING RENTAL HOUSING DYNAMICS & THE PANDEMIC
board. As shown in Figure 2, the largest year-over- year increases were in Alberta, with Calgary’s vacancy rate rising 2.7 percentage points (from 3.9% in 2019 to 6.6% in 2020) and Edmonton’s rising 2.3 percentage points (from 4.9% to 7.2%). The Ottawa-Gatineau CMA experienced an almost doubling in its vacancy rate, which rose by 1.6 percentage points (from 1.7% to 3.3%). At the other end of the spectrum, Winnipeg and Quebec City experienced relatively muted increases in their vacancy rate compared to the other CMAs: the former’s rose by 0.7 percentage points (3.1% to 3.8%) while the latter’s rose by a comparatively marginal 0.3 percentage points (2.4% to 2.7%). Among Canada’s three largest metropolitan areas, Greater Toronto and Greater Montreal each had a vacancy rate of 1.5% in 2019, with Toronto’s jumping by 1.9 percentage points in 2020 (to 3.4%) and Montreal’s rising by 1.2 points (to 2.7%). In comparison, Metro Vancouver had the lowest vacancy rate in 2019, at 1.1%, reflecting a very constrained rental market. The region’s vacancy rate increased by 1.5 percentage points by the end of 2020—a bigger jump than that of Montreal (1.2 percentage points) and, as previously noted, Winnipeg and Quebec City. Despite this rise, Metro Vancouver’s vacancy rate remained the lowest of Canada’s eight largest CMAs in 2020. The experience amongst municipalities within Metro Vancouver was relatively consistent, in that purpose-
built rental vacancy rates generally rose over the past year. This includes the city of Vancouver (where the vacancy rate rose by 1.8 percentage points, going from 1.0% to 2.8%), Burnaby (up 1.9 percentage points, from 1.3% to 3.2%), and the city of North Vancouver (up 2.1 percentage points, from 0.5% to 2.6%). The most notable instance of vacancies rising was in the area that includes the University of British Columbia, where the vacancy rate leapt from 0.4% in 2019 to 13% in 2020; this was a direct result of the reduction of on-campus learning, with many domestic students choosing not to live near campus, as well as thousands of international students choosing not to reside in Canada for the 2020/21 school year. While vacancy rates in the secondary market are generally lower than in the purpose-built segment (individual rental home owners have a lower financial tolerance for empty units than do owners of multi-unit rental properties), they evolved in a similar manner to those in the purpose-built segment across the country over the past year. Of Canada’s eight largest CMAs, six saw their secondary market vacancy rates increase in 2020, with each of Ottawa and Edmonton experiencing a decline. In those two markets, the vacancy rate in the secondary market fell by 0.6 and 0.5 percentage points, respectively, bringing the vacancy rate down to 0.3% in Ottawa and 2.0% in Edmonton. Among the vacancy rate risers, Quebec City led the way with a 1.8 percentage-point increase (from 1.4% to 3.2%), followed by Toronto (0.9 percentage points; 0.8% to 1.7%) and Calgary (0.7 percentage points; 0.9% to 1.6%). In Metro Vancouver, the secondary market vacancy rate doubled, albeit from a low base: between 2019 and 2020, vacancy jumped from 0.3% to 0.6%, a 0.3 percentage point increase. Rounding out Canada’s eight largest CMAs was Montreal, rising 0.2 percentage points (1.8% to 2.0%), and Winnipeg, increasing by 0.1 percentage points (1.6% to 1.7%). Almost without exception, in markets across the country, including both the primary and secondary rental segments, there was a re-balancing of supply and demand conditions in 2020. Notable amongst these changes seen across Canada was Metro Vancouver remaining the most constrained per its low vacancy rate. RENTAL RATES Interestingly, while vacancy rates rose throughout the country in 2020, average rents generally did not decline; instead, they generally increased at a slower pace than in 2019.
FIGURE 2: VACANCY RATES (PURPOSE-BUILT)
WPG
TOR CGY EDM OTT-GAT QUE
VAN MTL
7.2%
6.6%
4.9%
3.9%
2.6% 2.7% 3.4% 3.3% 3.8%
3.1%
2.4%
1.1% 1.5% 1.7%
2019
2020
APR I L 202 1 — P A G E 5
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