The average rental apartment vacancy rate in Canada’s 35 major centres increased to 2.8 per cent in October 2009 from 2.2 per cent in October 2008. The centres with the highest vacancy rates in 2009 were Windsor (13.0 per cent), Abbotsford (6.1 per cent), Peterborough (6.0 per cent), Calgary (5.3 per cent), and London (5.0 per cent). On the other hand, the major urban centres with the lowest vacancy rates were Regina (0.6 per cent), Québec (0.6 per cent), St. John’s (0.9 per cent), Winnipeg (1.1 per cent), Kingston (1.3 per cent), and Victoria (1.4 per cent).

Demand for rental housing in Canada decreased due to slower growth in youth employment and improved affordability of homeownership options. Rental construction and competition from the condominium market also added upward pressure on vacancy rates.

The highest average monthly rents for two-bedroom apartments in new and existing structures were in Vancouver ($1,169), Calgary ($1,099), Toronto ($1,096), and Ottawa ($1,028). The lowest average monthly rents for two-bedroom apartments in new and existing structures were in Saguenay ($518), Trois-Rivières ($520), and Sherbrooke ($553).

Year-over-year comparison of rents in new and existing structures can be slightly misleading because rents in newly-built structures tend to be higher than in existing buildings. However, by excluding new structures, we can get a better indication of actual rent increases paid by most tenants. The average rent for two-bedroom apartments in existing structures increased in all major centres. The largest rent increases in existing structures were recorded in Regina (10.2 per cent), Saskatoon (8.3 per cent),Victoria (5.0 per cent), and St. John’s (4.9 per cent). Overall, the average rent for two-bedroom apartments in existing structures across Canada’s 35 major centres increased by 2.3 per cent between October 2008 and October 2009.

CMHC’s October 2009 Rental Market Survey also covers condominium apartments offered for rent in Calgary, Edmonton, Montréal, Ottawa, Québec, Regina, Saskatoon, Toronto,Vancouver, and Victoria. In 2009, vacancy rates for rental condominium apartments were below two per cent in seven of the 10 centres surveyed. Rental condominium vacancy rates were the lowest in Toronto, Saskatoon, and Ottawa. However, Regina and Edmonton registered the highest vacancy rates for condominium apartments at 3.0 per cent and 3.1 per cent in 2009, respectively.

The survey showed that vacancy rates for rental condominium apartments in 2009 were lower than vacancy rates in the conventional rental market in Ottawa, Saskatoon,Vancouver, Toronto, Edmonton, and Calgary. The highest average monthly rents for two- bedroom condominium apartments were in Toronto ($1,487),Vancouver ($1,448), Calgary ($1,310), and Victoria ($1,223). All surveyed centres posted average monthly rents for two- bedroom condominium apartments that were higher than average monthly rents for two-bedroom private apartments in the conventional rental market in 2009.

Following a 56 per cent decline in 2008, total housing starts across the Edmonton Census Metropolitan Area (CMA) are on pace to decrease by another 24 per cent this year to 5,000 units. This will represent the lowest level of activity for the region’s home builders since 1997. While single- detached construction has staged a modest recovery since the summer, a continued downturn in the multi- family sector will hold down this year’s numbers. In 2010, a sustained improvement in single starts combined with a moderate rebound in multiples will boost total starts by 29 per cent to 6,450 units. While representing a sizable gain over this year’s volumes, total starts next year remain a fraction of the 10,600+ units started on average during the 10 year period 1999-to-2008.

Single-detached starts increased by 14 per cent during the first nine months of 2009 but the improvements have come on gradually as the year has progressed. Activity levels were down by 39 per cent year-over-year at the end of the first quarter but have generally exceeded last year’s production since then. Price reductions, various incentives, and low mortgage rates have helped to bolster demand in 2009. This trend should continue for the balance of 2009, with annual production nearing the 3,200 unit mark. This will represent an increase of 22.5 per cent over 2008 but will still be well below activity levels reported over the past decade. Look for these gains to continue in 2010, with single starts of around 4,200 units. The tepid outlook for employment growth will temper the rate of increase going into 2010. Inventory levels, including show homes, peaked in August 2008 and have been trending downward throughout much of the past year. As shown in Figure 2, the show home component of inventory has started to move upward as builders ramp-up marketing efforts. The inventory of complete and unabsorbed spec homes, meanwhile, has trended to its lowest levels since September 2006.

Statistics Canada’s New House Price Index (NHPI) is forecasted by CMHC to decrease by 10.5 per cent this year before staging a two per cent improvement in 2010. These price changes have begun to show up in CMHC’s market absorption surveys but the overall average absorbed price has held up surprising well in 2009. To the end of August, the average absorbed price increased this year nine per cent to $545,327. While units priced under $400,000 and over $600,000 have gained market share this year, mid-range product selling between $400-600,000 lost ground compared with last year.

CMHC forecasts an average absorbed single-detached price this year of close to $535,000, for a 4.5 per cent gain over 2008. The expected median value will be much lower as the impact of high-priced homes is less using this measure. In 2010, the absorbed average price will soften due to the lagged effect of when homes are priced (often before construction begins) and when they are captured in our survey (which is at completion). The pressure for higher negotiated selling prices will come from builders who had trimmed their margins over the past year in order to clear their unsold inventory. With better economic times ahead, land and labour costs as well as material prices such as lumber and concrete are expected to increase.

OTTAWA – June 15th, 2009 – National resale housing market activity returned to pre-recession levels in May 2009. The rebound in activity is being led by an increase in transactions in some of the most expensive markets in the country, which is skewing the national average price upward.

According to statistics released by The Canadian Real Estate Association (CREA), actual (not seasonally adjusted) home sales via the Multiple Listing Service® (MLS®) of Canadian real estate boards totaled 49,521 units in May 2009. This is less than one per cent below activity in the same month one year ago. Year-over-year declines have been shrinking since the beginning of the year.

The seasonal increase in activity continues to be stronger than normal. As a result, seasonally adjusted home sales rose eight per cent to 37,649 units in May compared to April. This marks the fourth consecutive monthly increase in seasonally adjusted activity. Seasonally adjusted activity in May was 43 per cent above where it stood in January 2009.

Seasonally adjusted sales were up on a monthly basis in about 70 per cent of local markets. Monthly activity gains in Toronto (nine per cent), Calgary (25 per cent), Montreal (10 per cent), Vancouver (eight per cent), and Edmonton (12 per cent) contributed most to the overall increase in monthly activity.

The national MLS® residential average sale price in May 2009 reached the highest monthly level on record. At $319,757, it was up fourth tenths of a percentage point from the previous record set in May 2008. Over the past four months, the national MLS® residential average price has recovered 16.4 per cent from the low in January. The average price for MLS® home sales climbed to new heights nationally, and in Saskatchewan, Ontario, Quebec, New Brunswick, and Nova Scotia. New records were posted in only 15 per cent of local markets in May, none of which are among the most active or expensive. The strong rebound in sales activity, not price, in Canada’s most expensive markets is driving up average prices nationally and in some provinces, just as a sharp decline in activity in these markets pushed average prices lower in late 2008.

The supply of homes coming onto the MLS® market continued to decelerate in May. Seasonally adjusted MLS® residential new listings edged lower by eight tenths of a percentage point to 65,070 units, the lowest level since December 2005. Seasonally adjusted new residential listings in May were 19 per cent below the peak reached one year ago.

With the number of sales rising strongly and new listings trending downward, the balance between supply and demand is firming up in British Columbia, Alberta, Saskatchewan, Ontario, and Quebec. This resulted in national sales activity as a percentage of new listings reaching the highest point since December 2007. Residential dollar volume for MLS® sales climbed 10 per cent from the previous month to reach $11.4 billion in May. This is more than 50 per cent above the low of $7.5 billion reported last January.

“Sales activity is now closer to the pre-recession peak than it is to the recent low point reached last January,” says Regina Broker Dale Ripplinger, President of The Canadian Real Estate Association. “Strengthening consumer confidence, low interest rates, and improved affordability are drawing buyers to the housing market across Canada,” he added.

“Fueled by a string of monthly increases in activity, the number of transactions in May reached the highest point since July 2008,” said CREA Chief Economist Gregory Klump. “Inventory levels are still high in many markets, but fewer new listings and rising sales activity suggests that the selection of homes available for sale may shrink as the year progresses. The supply of homes up for sale needs to be drawn down further before average price increases become more widespread among local markets.”

PLEASE NOTE: The information contained in this news release combines both major market and national MLS® sales information from the previous month. The Canadian Real Estate Association has previously released these separately.

CREA cautions that average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighborhoods or account for price differential between geographic areas. Statistical information contained in this report includes all housing types.

MLS® is a co-operative marketing system used only by Canada’s real estate Boards to ensure maximum exposure of properties listed for sale.

The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade associations, representing more than 96,000 REALTORS® working through more than 100 real estate Boards and Associations. Further information can be found at www.crea.ca

“Good news for the market in ON”, – Moishe Alexander, CFC CEO

The Edmonton Alberta rental market is experiencing vacancy rate increases. In fact, the rental vacancy rate has increased substantially from 1.5% in 2007 to 2.4% in 2008.

It is tougher times for landlords in Edmonton Alberta to rent their units.

APARTMENT VACANCIES MOVE HIGHER IN 2008

Edmonton, Alberta - Credit Lana, Flickr

The Canada Mortgage and Housing Corporation reported that the Edmonton Alberta area is experiencing an increased amount of vacancies in rental housing in all sectors. Much of this is attributed to migration out of the province of Alberta, which has seen over 1600 families leave the Edmonton Alberta area in 2008. CMHC attributes some of this up-turn in the vacancy rate to competition from secondary rental market of the units, and investor owned condominium apartment increases in 2008.

INCREASED SUPPLY OF PURPOSE-BUILT RENTAL UNITS

According to Canada Mortgage and Housing Corporation, private homeowners and investors in Edmonton Alberta have increased the rental housing stock by 21% for the first 10 months of 2008. This is caused a surplus of rental housing stock in the Edmonton Alberta area.

SECONDARY RENTAL MARKET IS BECOMING INCREASINGLY IMPORTANT TO THE HOMEOWNER TO SUPPLEMENT THEIR INCOME DURING THIS WORLD ECONOMIC CRISIS

The Canada Mortgage and Housing Corporation report states that since there is a migration problem in Edmonton, and the unemployment rate is up 3.4%, a strong demand has occurred for rental units to be created by home owners, which is called the “secondary rental market”. Pressure is being excreted on the local municipality cities to relax their zoning and building codes to permit additional secondary rental units in private homes.

APARTMENT RENT INCREASES MODERATE IN 2008

The Canada Mortgage and Housing Corporation report states that last fall in Edmonton Alberta, a one-bedroom apartment that used to rent for $764.00 is now renting for $783.00 compared to the same period last year. A two-bedroom unit that rented last year for $744.00 are now renting for $762.00, which is approximately 25% increases.

Government sources say that with this increase cost, welfare recipients are hard pressed to rent anything in Edmonton Alberta.

INCENTIVES RETURN AS VACANCIES INCREASE

Canada Mortgage and Housing Corporation report that in 2007, and then in 2008, landlords have started offering tenants incentives for the first time in 15 years to rent apartments. Incentives often include benefits such as one-month free rent, or 2-year leases (with fixed rental payments), extra appliances, free cable TV, or free parking and or high-speed Internet.

RENTAL AFFORDABILITY INDICATOR

Canada Mortgage and Housing Corporation affordability indicator 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 Kelowna 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/64379/64379_2008_A01.pdf

Edmonton, Alberta - Credits PinkMoose, Flickr

The Edmonton Alberta Housing Market in new home sales is taking a huge downturn from the record levels 2008 by 56%. However, the housing market in Edmonton will start to recover in the latter part of 2009. The Canada Mortgage and Housing report that was released in the fourth quarter of 2008, shows a graph of the housing starts both ups and down in the Edmonton Alberta market.

SINGLE-DETACHED CONSTRUCTION TO IMPROVE IN 2009

The Canada Mortgage Housing Corporation reported that housing starts will dip 66% in 2009. This reduction in housing starts will also cause for new housing starts to drop from 3000 units to approximately 2600 units in 2009 in the Edmonton Alberta market.

With the demand that was previously high, the average time to build a detached home has increased over the past 7 years in Edmonton, from 6 months to just over 13 months. The average price for a new detached home in Edmonton Alberta has increased from $418,954.00 to $498,961.00, in 2009, which is an increase of 19% over the same period last year.

MULTIPLE DWELLING STARTS EASE IN 2009 OVER INVENTORY CONCERNS

The Edmonton Alberta real estate market after four years of double-digit price growth, like other housing markets in Canada, experienced extreme growth in 2007. However, there was a 23% decline in housing sales in the latter part of 2008. However, it is predicted in 2009 by Canada Mortgage and Housing Corporation that the sales will stabilize but still there will be a 32% reduction in sales, as compared to 2006 and 2007.

ECONOMY SOLID REGIONAL ECONOMIC FUNDEMENTALS

The economic and employment outlook for growth in the Edmonton Alberta area is predicted to reduce in 2009, and is projected to reduce more substantially then any other province as a whole by the Canada Mortgage and Housing Corporation, in their fourth quarter report in 2008.

However, the capital region, located in the central part of the province, and all other surrounding neighborhoods will generate substantial economic and employment growth throughout all of 2009. In fact, Canada Mortgage and Housing Corporation predicts that area employment in Edmonton Alberta will grow by 2.4% in 2009, with new jobs being added in the high-tech, trade, healthcare, personal and other service related industry sectors.

Edmonton Alberta is one of the few regions that is still experiencing a shortage of workers, and is attempting to implement policies to encourage migration.

MORTGAGE RATES

Canada Mortgage and Housing Corporation predict that interest rates will decline by a further 25-50 basis points from their current levels in 2009. However, due to the cost of borrowing to the Canadian banks from the markets, the mortgage interest rate will marginally increase in the latter half of 2009, but not significantly enough to negatively affect the housing market in Edmonton Alberta.

You can find the entire report in PDF format through the following link:
http://www.cmhc-schl.gc.ca/odpub/esub/64343/64343_2008_B02.pdf