Increasing home ownership levels combined with the city’s condo construction boom helped ease Ottawa’s residential rental rate in 2012, according to data released Thursday.
The Canada Mortgage and Housing Corporation’s rental market report showed the vacancy rate clocked in at 2.5 per cent for the year, up from 1.4 per cent a year earlier.
“Although the vacancy rate in Ottawa edged up in 2012, the capital city continues to have one of the lowest vacancy rates in the country,” said Sandra Pérez-Torres, CMHC’s senior market analyst for the Ottawa region, in a statement.
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Fewer people looking to rent helped drive the vacancy rate up, the report said. Many took advantage of low interest rates to buy homes while those in the 15 to 24 age category were more likely to live with parents as a result of poor employment prospects.
That probably won’t last, though, as the CMHC expects Ottawa residents will be less willing to purchase homes next year due to what they believe will be a rise in prices. As a result, the national housing agency expects Ottawa’s vacancy rate to fall to two per cent in 2013.
An increase in the size of the rental inventory also played a role, as many of the new condominium units sprouting up across the city are being purchased by investors and rented out.
The average cost of renting a two-bedroom apartment also increased by two per cent. That’s lower, however, than the 2.3 per cent increase that took place in 2011.
Nationally, Canada’s overall apartment vacancy rate has risen over the past year, with an increased supply of rental units and a slowdown in household formation by Canadians being cited among the reasons.
CMHC says the average vacancy rate in 35 major metropolitan areas across the country rose to 2.6 per cent in October from 2.2 per cent in October 2011.
However, the federal agency says demand for rental condominium apartments remained strong, with the vacancy rate holding steady in most of Canada’s largest urban centres, including Toronto, Montreal and Vancouver.
Major centres with the lowest vacancy rates in the primary apartment rental market were Regina (1.0 per cent), Thunder Bay (1.1 per cent) and Calgary (1.3 per cent).
Those with the highest vacancy rates were in Saint John, N.B., (9.7 per cent), Windsor, Ont., (7.3 per cent) and Moncton, N.B., (6.7 per cent).
Meanwhile, CMHC says average rent for two-bedroom apartments in existing structures increased 2.2 per cent in the same period.
“Lower levels of household formation among young adults reduced rental housing demand,” said Mathieu Laberge, deputy chief economist at CMHC’s Market Analysis Centre.
“This, combined with an increase in the supply of newly constructed, purpose-built rental apartments, pushed Canada’s vacancy rate upward.”
The highest average monthly rents for two-bedroom apartments in new and existing structures in Canada’s major centres were in Vancouver ($1,261), Toronto ($1,183) and Calgary ($1,150).
The lowest average monthly rents for two-bedroom apartments in new and existing structures were in Saguenay ($549), Trois-Rivieres ($550) and Sherbrooke, Que. ($578).
-With a report by The Canadian Press
