January 15, 2009 — Moishe Alexander’s review on how the current world economy and Canadian economic down turn is affecting the Sudbury Ontario rental market
Sudbury, Ontario - Credit Habi, Flickr
The Sudbury Ontario rental market has one of the lowest apartment vacancy rate at 0.7% in the country. In fact, the rental town house vacancy rate dropped substantially to 0.2% for 2008. These two figures together leave a net vacancy rate of 0.6%.
It is desperate times for tenants in Sudbury Ontario to find any proper rental accommodations, as there are line-ups at landlord’s offices.
VACANCIES EDGE UP , BUT SUDBURY MARKET STILL TIGHT
The Canada Mortgage and Housing Corporation reported that Sudbury Ontario is experiencing an increase need for rental housing in all sectors. Much of this is contributing to the demand by the significant post secondary population in the area along with a strong local labor market, especially in mining. These statements and figures come from the rental market report issued in 2008 by Canada Mortgage and Housing Corporation. More than 50,000 people (net migration) moved to Sudbury Ontario last year from other provinces and countries putting additional stress on an already stressed out rental housing market.
VERY LITTLE NEW SUPPLY OF PURPOSE-BUILT RENTAL UNITS OR ANY HIGH RISE RENTAL UNITS
According to Canada Mortgage and Housing Corporation, despite the extreme demand for rental housing in Sudbury Ontario, only 16 purpose-built rental starts occurred in Sudbury and surrounding areas for the first 10 months of 2008. This is caused a panic for tenants and an extreme appreciation in value for single detached homes in Sudbury Ontario.
SEVERAL REASONS FOR CONTINUED LOW VACANCY RATE
The Canada Mortgage and Housing Corporation report states that many factors have combined to keep greater Sudbury vacancies low. Even though there has been falling commodity prices for iron or the mining sector, it has kept demand solid for rental accommodations. Migration continues into the region, attracted by the jobs, post secondary school opportunities, and retirement living. Sudbury boasts the science north attraction and all main hospitals for Northern Ontario that are fully operational are situated in Sudbury.
CONTINUES STRONG RENT INCREASES
The Canada Mortgage and Housing Corporation report states that last fall in Sudbury Ontario, a one-bedroom apartment that used to rent for $782.00, plus utilities is now renting for $850.00, plus utilities, compared to the same period last year. A two-bedroom unit that rented last year for $950.00, plus utilities, is now renting for $1,050.00, which is approximately a 20% increase.
Government sources say that with this increase cost, welfare recipients are hard pressed to rent anything in Sudbury Ontario. Tight vacancy rates in this area of the province have caused rents to increase substantially for the same period last year. However, rent increases in purpose-built apartment rent units were moderate in most areas of the city including Chelmsford and Minnow Lake.
SUDBURY VACANCIES RESUME DOWNWARD DECENT
Canada Mortgage and Housing Corporation is projecting that vacancy rates in Sudbury Ontario and surrounding areas, will remain the lowest in the country in 2009. Mainly due to non-construction of rental units and a significant increase in migration. In fact, Canada Mortgage and Housing Corporation is predicting that the vacancy rate in Sudbury Ontario and surrounding areas for the period ending 2009, will be 0.07%, which is a phenomenal vacancy rate.
SUDBURY’S RENTAL AFFORDABILITY INDICATOR
Canada Mortgage and Housing Corporation affordability indicator will decline to 74 by year-end 2008, which indicates that the value of 100 suggests that 30% of the median income of rental households is necessary to rent a two bedroom apartment, well above the Canadian average.
NATIONAL VACANCY RATE DECREASED IN OCTOBER 2008
Canada Mortgage and Housing Corporation reports that the vacancy rate in Canada’s 34 major centers decreased to 2.2% from 2.6% in October of 2008, for the same period the year before. Vacancy rates were as high as 14.6% in Windsor to a low of 0.3% in Vancouver and Abbotsford BC.
Canada Mortgage and Housing Corporation reports that the highest average monthly rent for a two bedroom apartment is in Calgary, Alberta with a monthly rental cost of $1,148.00 to a low of $543.00 in Sherbrooke, Quebec.
You can find the entire report in PDF format through the following link:
http://www.cmhc-schl.gc.ca/odpub/esub/65780/65780_2008_A01.pdf
