In 2001, the vacancy rate in Charlottetown reached a record low of 1.8 per cent, as the construction of rental units was somewhat limited throughout the 1990′s. In response to the low vacancy rate, local developers built higher levels of rental buildings from 2002 to 2006. This strong level of rental construction resulted in a rising vacancy rate from 2003 to 2007. Last fall this trend was reversed, as the vacancy rate declined for the first time in five years due to reduced rental construction in 2007 and 2008. However, the vacancy rate inched back up this year as rental starts are once again on the rise. The increased level of construction pushed the vacancy rate for apartment structures containing three or more units in the Charlottetown CA to 3.4 per cent up from 2.3 per cent last year. The October 2009 survey aggregated the rental information for 3,888 rental units in the Charlottetown area, which was up from the 2008 figure of 3,790 units. Of the surveyed units, 131 were vacant in 2009, compared to 86 vacant units during the same period last year. The 2009 survey revealed that vacancies among two-bedroom units, which make up the majority of the local rental universe, were higher with 78 vacant units, compared to 54 units last year. As a result, the vacancy rate for two-bedroom units rose to 3.1 per cent from 2.2 per cent last year. Among the other unit types the change was more pronounced. One- bedroom units recorded the largest change, as the vacancy rate for these units increased from 2.0 per cent last year to 4.4 per cent in 2009.

Overall, the average rent in Charlottetown was $658 per month in 2009. For the fourth year in a row, CMHC is measuring the change in rents for existing structures (i.e., those common to the current and previous years’ surveys). Focusing on existing structures excludes the impact of new structures added to the rental universe between surveys and provides a better indication of the rent increase for existing structures. For the Charlottetown CA, the average rent for all bedroom types in existing structures increased by 4.8 per cent in October 2009 compared to a year ago. This year’s increase of 4.8 per cent is very close to the 5.0 per cent increase allowed for heated premises by the Island Regulatory and Appeals Commission (IRAC), which manages residential rental increases on the Island. As most of the units in the Charlottetown area include heat in the rent, it is not unexpected that the actual increase mirrored the increase allowed by IRAC. In 2009, there was very little reason to discount rents now that all of the projects built over the past six years have been integrated into the market. Also, owners were looking to increase rents in an effort to make up for the high heating costs experienced in the 2007/2008 winter due to the rapid rise in the price of heating oil. There was a significant difference in the increase in two-bedroom rents recorded in Zone 1 (Downtown) and Zone 2 (Peripheral). In Zone 1, the average two-bedroom rent advanced by 3.9 per cent, while in Zone 2 the increase was more impressive at 5.8 per cent, as measured by the fixed sample.

In addition to the vacancy and rent data that is collected each year as part of the annual Rental Market Survey, landlords and property managers were asked about rental unit availability. A rental unit is considered available if the existing tenant has given, or has received, notice to move, and a new tenant has not signed a lease; or the unit is vacant. Based on the results from the 2009 Rental Market Survey, the availability rate in the Charlottetown CA moved up to 4.9 per cent in 2009 from last year’s level of 4.0 per cent. Within the CA, the availability rate was identical in both Zones 1 and 2 at 4.9 per cent. Among the different bedroom types, one-bedroom units posted the highest availability rate in 2009 at 5.8 per cent. The availability rate for bachelor and two-bedroom units was 4.8 per cent for both.

According to the 2009 Rental Market Survey, the largest apartment buildings in the Charlottetown area command the highest average rents and enjoy the lowest vacancy rates. In the October survey, apartment buildings in the Charlottetown area with between 50 and 99 units posted the lowest vacancy rate at 1.8 per cent, which was well below the overall vacancy rate of 3.4 per cent. The second largest buildings in the area, ranging from 20 to 49 units, also saw lower vacancies with a rate of 3.0 per cent. In addition to having the lowest vacancy rate, the largest buildings also commanded the highest average rents. Buildings with 50 to 99 units had an average rent of $760, while the smallest structures, those with three to five units recorded an average monthly rent of $608. This escalation of rents from smaller to larger buildings is logical, when considering that more amenities tend to be offered to tenants as the building size increases. These features such as elevators, underground parking, security measures and common rooms raise the construction and operating costs for owners, which in turn are passed on to tenants.

The vacancy rate among apartments with at least three units (3+) in the Thunder Bay Census Metropolitan Area (CMA) inched up to 2.3 per cent in October 2009, from 2.2 per cent last year, according to Rental Market Survey (RMS) data released in December by Canada Mortgage and Housing Corporation (CMHC). (See Table 1.1.1) With the October vacancy rate’s slight increase, Thunder Bay now becomes the CMA with the tenth lowest vacancy rate for 33 centres with populations over 100,000 in Canada. Northern Ontario’s other major centre, Sudbury saw its rate rise to 2.9 per cent from 0.7 per cent last year. Meanwhile, elsewhere in Northwestern Ontario, Kenora’s vacancy rate declined to 0.8 per cent from 1.7 per cent in October 2008.

The vacancy rate in Thunder Bay was up only slightly this year as several opposing forces came into play. Improvement in homeownership affordability caused by falling interest rates has encouraged some renters to become homeowners. Low ownership costs in Thunder Bay combined with rising apartment rents reduced the relative cost of homeownership – dampening demand for rental accommodation. There are other factors that have added to rental demand and exerted downward pressure on vacancy rates. Although there has been a long-term out-migration amongst the 18 to 24 renter aged group, important trends emerged recently. Employment in the service sector and 18-24 age groups have held up reasonably well, possibly exerting slight upward pressure on rental demand, as young adults are more likely to rent rather than own. Overall, employment has fallen 5.5 per cent over the past year between the 2008 and 2009 surveys. However, the brunt of the job losses has been in the goods-producing sector and the 25-44 age group, arguably sectors not directly associated with rental demand. Next, demand coming from students in post-secondary institutions has increased rental demand. Enrolment in post-secondary institutions has been growing in Thunder Bay. Less space in student housing has caused spillover in the private market creating demand for units located in proximity to Lakehead University and Confederation College. Laid off workers returning to school as mature students are creating additional demand for private rentals. In addition, recent data has indicated no new sources of rental supply. Going back to 1998, there have been few rental completions added to the supply of rental units in Thunder Bay.

The availability rate1 is a slightly broader measure of what landlords have available to market to prospective tenants. The availability rate refers to the percentage of apartments that are either vacant or for which the existing tenant has given or received notice to move. Once again, availability rates moved in the same direction as the vacancy rate in Thunder Bay. Thunder Bay’s availability rate rose to 3.1 per cent from 2.7 per cent in 2008. Only one of the 15 metropolitan areas in Ontario had a lower availability rate than Thunder Bay, namely Kingston (2.5 per cent). Higher availability rates are a result of higher turnover. (See Table 1.4.)

Renters had an easier time finding rental accommodation in Vancouver this fall, compared to last year. Higher rental apartment vacancy rates have meant that renters have more choice. Although higher than last year, Vancouver’s vacancy rate is still below the national average and among the lowest in the country.

A slowdown in employment sent Vancouver’s rental apartment vacancy rate higher in 2009. The vacancy rate increased to 2.1 per cent, after sitting below one per cent for three consecutive years. Unemployment in the Vancouver Census Metropolitan Area (CMA) for the first ten months of 2009 increased to seven per cent from 4.3 per cent for the same period last year. Although employment has been gradually improving since the spring of this year, it has only been in the last couple months that full-time employment has grown.

A shift to homeownership also contributed to higher rental vacancy rates in 2009. A combination of low mortgage rates and home prices off their peak value has meant that monthly mortgage payments are lower. As of September 2009, the average monthly mortgage payment for an apartment condominium was approximately ten per cent less than it was one year ago3. Although the average mortgage payment is still higher than the average monthly rental payment, some renters have chosen to take this opportunity to enter homeownership.
Virtually all communities in the Metro Vancouver area saw an increase in vacancies in 2009. The only exception to this was the University Endowment Lands (UEL). The vacancy rate in the UEL, along with several areas of Vancouver City and North Vancouver, remained tight, below one per cent in October 2009.Vancouver City, with its educational infrastructure and job opportunities in the business centre, and the lifestyle communities of West Vancouver and White Rock recorded vacancy rates just over one per cent.Vacancies increased in all other municipalities, with suburban communities north of the Fraser River near three per cent, and communities south of the Fraser, in the 4-6 per cent range.

The rental availability rate4 for private rental apartments moved higher in 2009. The availability rate increased to 2.8 per cent in October 2009, from 1.1 per cent a year earlier. The vacancy rate for investor-owned rental condominiums increased in 2009, but to a lesser extent than that for purpose-built rental units. The rental condominium vacancy rate moved up to 1.7 per cent from 0.6 per cent last fall. The stock of rental condominiums is generally newer and features more amenities than their purpose-built rental counterparts. These benefits shore up demand for rental condominiums.

According to the latest Rental Market Survey data collected in October by CMHC, the average vacancy rate in privately initiated rental apartments in the Ottawa Census Metropolitan Area (CMA) increased only slightly from last year to 1.5 per cent. Consequently, Ottawa remained one of the tightest rental markets in Ontario.

The low vacancy rate was the result of two contrary influences. On the one hand low borrowing costs coupled with steady employment conditions in the Capital City gave many renters the right incentives to jump into the homeownership market pushing the vacancy upwards. On the other hand minimal rental apartment construction and fewer secondary rental market units kept vacancies low. While both influences roughly balanced each other out, the outflow of households from rental accommodations into homeownership was relatively stronger.

Availability rate is a slightly broader indicator than the vacancy rate, as it captures both the currently vacant rental stock and the stock for which the tenant has given or received notice to vacate. While the vacancy rate remained largely stable at a low of 1.5 per cent, the availability rate jumped from 2.9 per cent in 2008 to 3.5 per cent in 2009.

This suggests that it is possible that some buyers, who are currently renting, have not taken occupancy of their new homes yet, but have already given their landlords their two months notice. The slight jump in availability could also indicate that in Ottawa’s tight rental market, leased units are occupied quite rapidly after they become vacant, maintaining a stable vacancy rate.

Employment performance among first time buyers’ ages 25 to 44 years old has been very resilient, remaining on par with levels this time last year. Labour market recovery for this age cohort has been remarkable and has enabled some potential first time buyers to take full advantage of declining borrowing costs. An economic environment of low interest rates unleashed the pent-up demand accumulated early in 2009. As a result, the movement out of rental and into homeownership in this age group has been significant, pushing vacancy rates upwards.

Another factor supporting the increase in vacancy rate is the weak employment performance among young renters. The age cohort between ages 18 to 24 has been the weakest when compared to other age groups. Total year-to-date full time employment is down 8.7 per cent from last year. Rising unemployment within this age group has obliged some young adults to remain in their parental home, dampening the rate of household formation.

According to the results of the Rental Market Survey conducted by CMHC in October, the market remained tight in the Québec CMA, as the vacancy rate stayed at 0.6 per cent. As well, the availability rate, which measures the percentage of units up for rent, was also low (1 per cent). This indicator revealed that a small proportion of tenants intend to put an end to their leases. The percentages of vacant units and available units on the market were therefore low. Demand for apartments has been strong, and supply has increased only slightly in recent years. The economic conditions prevailing in the area have contributed to maintaining demand for rental housing, with the low unemployment rate and solid job market having stimulated the formation of young households and the migration of workers to the CMA. In addition, youth employment rose this year. It should be noted that young households with a primary maintainer aged under 25 years are most often (9 times out of 10) renters.

The Québec CMA has the tightest rental market in the province. And, the Québec area, along with the Regina CMA, also had the tightest rental market conditions in the country. Across the province of Quebec, conditions remained stable in the Gatineau, Montréal and Saguenay areas, as well, while they eased in Sherbrooke and Trois-Rivières. Vigorous demand Since the beginning of the decade, the rental market has been tight in the CMA. It should be pointed out that employment has grown and that the unemployment rate reached an all-time low in 2008 (4.5 per cent). During the first half of 2009, the labour market resisted the global recessionary climate, as employment increased in the first two quarters. However, a decline was noted in the third quarter. In the end, the number of jobs should remain stable in 2009 and rise slightly in 2010 (+0.5 per cent). This contrasts with the conditions observed in the other urban centres across the province, where decreases in employment have been noted since the beginning of the year.

The economic conditions therefore remained favourable in the area, as net migration rose to 4,350 people in 2007/2008, for a gain of 6 per cent over the year before. According to the available data, net migration will be high in the area for the current decade, reaching a total of about 40,000 people, compared to just 20,000 during the 1990s. The large number of new residents is significantly fuelling demand for rental housing. In fact, interregional migration is considerable and mainly composed of young people aged from 15 to 24 years (66 per cent). The international migration component has also increased in recent years, but the area is still losing some residents to other Canadian provinces.

Construction stimulated by market conditions In 2007 and 2008, traditional rental housing construction was less significant than in previous years. This situation, combined with a steady demand, contributed to maintaining the tight conditions observed on the market in the area. Between 2008 and 2009, 459 traditional rental housing were completed, which reflects a small increase in supply, considering the size of the Québec area market and the strong demand. This year, however, construction was more vigorous. In all, 924 traditional apartments were started from January to October 2009, compared to 423 during the same period in 2008.

Market very tight for larger units The larger the unit size, the tighter the market conditions as, in October, the vacancy rate was 0.1 per cent for three-bedroom apartments, compared to 1.6 per cent for bachelor units. The availability rate was also lower for larger apartments (0.5 per cent). As well, the supply of such units was more limited, accounting for an estimated 14 per cent of the universe1. with 10,400 three-bedroom apartments out of a total of 71,900 units. Two-bedroom apartments, for their part, made up 51 per cent of the survey universe.

Conditions tight in all market zones The conditions prevailing in the nine market zones in the CMA reflected a strong demand in all sectors. However, the rental market in the Haute-Ville zone has eased slightly since last year, as the vacancy rate there rose from 0.7 per cent to 1.4 per cent. And, the availability rate in this zone reached 2.2 per cent this pas October–the highest in the area. The estimated change in the average rent could explain this easing of the market in the Haute-Ville zone, as rents there rose by 4.5 per cent over 2008, for the strongest increase among all market zones in the Quebec area. In addition, this zone has the highest rents, with the average rent for two- bedroom apartments having reached $881 per month this past October, or 30 per cent more than the average for the CMA ($676 per month).

It should be noted that the western part of the South Shore (Charny, Saint-Romuald, Saint-Jean- Chrysostome) had a vacancy rate of 0 per cent this past October, compared to 0.2 per cent the year before, while the eastern part of the South Shore (Lévis, Pintendre) saw its market conditions ease this year (with a vacancy rate of 0.9 per cent, up from 0.4 per cent).

The Government of Canada announced today that the County of Oxford has been approved for seven infrastructure loans as part of Canada’s Economic Action Plan.

The announcement was made by Dave Mackenzie, Member of Parliament for Oxford, on behalf of the Honourable Diane Finley, Minister of Human Resources and Skills Development Canada and Minister Responsible for Canada Mortgage and Housing Corporation (CMHC).

The County of Oxford has been approved for more than $12 million in low-cost loans from CMHC’s Municipal Infrastructure Lending Program (MILP):

• The Town of Ingersoll will see $1.7 million put to work for the reconstruction of Clark Road East and Wonham Streets,
• The Township of East Zorra – Tavistock will see an investment of $3 million for wastewater servicing in Innerkip,
• The Township of Blandford – Blenheim will benefit from $3.17 million for upgrades to the Wastewater Treatment Plant/Sewage Pump station in Platsville,
• The City of Woodstock is investing $200,000 to upgrade its Thames Valley Sewage Pump Station, and
• The Township of Zorra is investing $4.3 million for the Embro Wastewater Servicing Program.

“Our Government understands the importance of infrastructure in maintaining strong and prosperous communities,” said MP Mackenzie. “This program is opening the door for municipalities of all sizes to meet their housing-related infrastructure needs and create jobs. It’s good news not only for Oxford, but also for Ontario.”

Canada’s Economic Action Plan provides up to $2 billion in direct low-cost loans to municipalities, over two years, for housing-related infrastructure projects through the MILP. Municipal infrastructure loans are available to any municipality in Canada and provide a new source of funds for municipalities to invest in housing-related infrastructure projects. These low cost loans can also be used by municipalities to fund their contribution for cost-shared federal infrastructure programming.

“Oxford County is very happy to partner with all levels of government,” said Oxford County Warden Paul Holbrough. “Residents in Oxford will benefit for many years as a result of the funding being made available for these critical infrastructure projects”.

Eligible projects include infrastructure related to housing services such as water, power generation and waste services, as well as local transportation infrastructure within and into residential areas, such as roads, sidewalks, lighting and green space.

After two years of sharp declines, and coming off from a decade of annual housing starts largely above demographic needs, new housing construction is set to stabilize in 2009. Amid emerging positive signs in both the economic and financial fronts, total residential construction in the Kingston Census Metropolitan Area (CMA) will rise by 5.2 per cent this year, with 707 new starts.

In addition to the boost to homeownership demand due to low interest rates, the prospects for increased spill-over demand from a recovering resale market will likely result in a faster year-over-year pace of starts during the first half of 2010. As a result, total starts next year will reach 690 units for a slight 2.4 per cent decrease, thus stabilizing construction activity at a pace more in line with household formation.

Coming off from a historically challenging economic environment, the short-term forecast for Kingston’s residential construction industry remains for the most part optimistic. The substantial monetary easing and fiscal stimulus measures in Canada’s Economic Action Plan will improve economic fundamentals. This will renew household’s appetite for big-ticket items in the face of low interest rates.

While spill-over demand from the resale into the new home market typically takes time to fully materialize, Kingston’s new home market looks ripe for a modest recovery. First, new listings for resale have declined substantially from last year, thus lowering supply competition. Second, the level of unabsorbed new home inventories has returned below the long-term average. Finally, the year- to-date pipeline of properties under construction is substantially lower than for the same period last year, which means that there are resources available for future projects.

Kelowna area housing starts and sales of existing homes will move higher in 2010. Expect demand for both new and existing homes to pick up as the BC and Canadian economies record stronger growth.

Housing starts, led by the detached home sector, will increase in next year. Strong price competition from a well-supplied existing home market and rising inventories of new, completed and unoccupied apartment condominium units will constrain multi-family construction during the first half of 2010.

This year’s upswing in existing home sales will carry over into 2010. Competitive pricing, a good selection of listings and favourable interest rates will help sustain growth in demand for existing homes next year. Expect existing home prices to edge back up as demand improves and the supply of listings is drawn down.
Starts of detached homes are forecast

Starts of detached homes are forecast to increase next year, surpassing multi-family construction for the first time since 2004. The inventory of new, completed and unoccupied detached homes has begun to edge back down after climbing to record levels earlier this year. Lower lot prices and construction costs have allowed builders to more effectively compete with existing homes. Lot prices have declined in response to moderating demand and increased supply. New home buyers can look forward to an ample supply of building lots next yeara big change from the shortages seen prior to 2008. Competition from the existing home market will continue to exert downward pressure on new home prices in 2010.

Moderately price homes will remain the focus of new singles demand in 2010. Builders are targeting buyers seeking new detached homes in the $450,000 -$550,000 price range. Fewer buyers of resort-oriented homes and second residences have contributed to less demand for higher priced new homes this year. This segment of the new singles market continues to face especially strong price competition from a well-supplied existing home market.

Apartment rental construction will account for the lion’s share of multi- family starts in 2009 and first half of 2010. With rents up sharply and construction costs coming down, rental construction has become a more viable development opportunity than in recent years. Reduced demand for condominiums may free up some building sites for rental construction. Starts of apartment rental housing will total 140 units this year and another 150-200 units in 2010, the highest annual levels since the early 2000s.

New rentals will face competition from the condominium market in the short term as some developers rent out unsold units and more investor- owned rentals become available. The apartment vacancy rate is forecast to increase this year and next.

Expect condominium construction to pick up later next year as the nventory of new, completed and unoccupied condominium units and supply of existing condominiums is slowly drawn down. Condominium absorption has improved during recent months, but remains sluggish. Apartment condominium starts will total 150-200 units in 2010. The townhouse condominium sector will ollow suit, with more starts next year.

The announcement was made today by the Honourable Lynne Yelich, Minister of State for Western Economic Diversification, on behalf of the Honourable Diane Finley, Minister of Human Resources and Skills Development and Minister Responsible for Canada Mortgage and Housing Corporation (CMHC); Greg Brkich, Member of the Legislative Assembly for Arm River – Watrous, on behalf of the Honourable Donna Harpauer, Minister of Social Services and Minister Responsible for Saskatchewan Housing Corporation; and Marvin Gerbrandt, Mayor of Hanley.

“The Government of Canada is helping make affordable housing available in Saskatchewan and across Canada for those who need it the most,” said Minister Yelich. “These new units in Hanley are helping seniors access safe and suitable housing, and build a stronger future for themselves.”

“Our government is committed to providing affordable housing and housing services for the people of Saskatchewan, including seniors who helped build this province,” said MLA Brkich. “By working together with both levels of government and community partners, we are working to help meet various housing needs in Saskatchewan communities and building brighter futures and sustainable communities.”

“The Town of Hanley is proud of the opportunity to have provided seniors with affordable housing following the construction of a complex consisting of 12 two-bedroom suites,” said Mayor Gerbrandt. “Through this project, we have enabled the seniors of our community to stay in Hanley while encouraging other seniors to take advantage of what our town has to offer.”

The project consists of two buildings which were renovated into 12 two-bedroom rental units for low and moderate-income seniors, both singles and couples. The total capital cost of the project is approximately $1,200,000. Of that amount, the three levels of government provided $648,000 in the following manner: $324,000 from the federal government; $259,200 from the Province of Saskatchewan; and $64,800 from the Town of Hanley. The funding balance was provided in the form of mortgage financing (Saskatchewan Elks Foundation) and land contribution (Town of Hanley).

In 2008, the Government of Canada committed more than $1.9 billion over five years to improve and build new affordable housing and to help the homeless. Canada’s Economic Action Plan builds on this with an additional one-time investment of more than $2 billion over two years in new and existing social housing, plus up to $2 billion in loans to municipalities for housing-related infrastructure.