Funding of $7.68 million for 64 new affordable housing rental units for seniors and persons with disabilities living on low income was announced today in Sudbury.

The Honourable Diane Finley, Minister of Human Resources and Skills Development Canada and Minister Responsible for Canada Mortgage and Housing Corporation (CMHC), and the Honourable Rick Bartolucci, Ontario’s Minister of Community Safety and Correctional Services and Member of Provincial Parliament for Sudbury, on behalf of the Honourable Jim Watson, Ontario’s Minister of Municipal Affairs and Housing; along with John Rodriguez, Mayor of Greater Sudbury made the announcement.

“The Government of Canada is helping Canadians during these tough economic times and giving hope to seniors and persons with disabilities who need quality, affordable housing that meets their needs,” said Minister Finley. “This investment is possible through Canada’s Economic Action Plan, the federal government’s plan to stimulate the economy and create jobs during the global recession. For Ontario, this includes a $1.2 billion joint investment.”

“New housing initiatives like the one announced today add significant support to the Province`s efforts to reduce poverty and are welcomed here in Sudbury,” said Sudbury MPP Rick Bartolucci. “Ontario will continue to work with its federal and municipal partners to ensure new affordable housing units are built during the life of this program.”

“I am extremely appreciative of the support Greater Sudbury residents are receiving today from the Province of Ontario and the Government of Canada,” said Greater Sudbury Mayor John Rodriguez. “Finding a home in these new units will lift an enormous burden from the shoulders of someone who lives on a fixed income. We all deserve a safe place to call ‘home’, and I look forward to the day that the keys to these 64 apartments will turn in the locks.”

The Government of Canada wants to ensure that Canadians on fixed incomes can live with independence and dignity and remain in their communities, close to family and friends. Canada’s Economic Action Plan provides $475 million, over two years, to build new rental housing for low-income seniors and persons with disabilities. Overall, the Economic Action Plan includes $2 billion for new and existing social housing, plus up to $2 billion in loans to municipalities for housing-related infrastructure.

Canada’s Economic Action Plan builds on the Government of Canada’s commitment in 2008 of more than $1.9 billion, over the next five years, to improve and build new affordable housing and help the homeless.

Today’s announcement celebrates funding for 64 new affordable rental units at Copper Street Apartments, 192 Copper Street in Sudbury. The project is sponsored by Dalron Construction Limited.

The slackness in the resale market has directly impacted the new home market as has the slowing economy. Single-detached starts will fall to 160 units in 2009 and 170 in 2010, as the market comes more into line with long term demographic requirements. CMHC expects 30 row, condominium and apartment starts in 2009 and another 55 in 2010. Relatively tight rental market conditions and reasonable take up of condominium units will result in some of this activity over the next 18 months.

As Figure 2 indicates, there has been improvement in household incomes in Thunder Bay and with required income being more or less flat, affordability has improved. Next year, with home prices and incomes rising modestly, homeownership should remain an affordable option and therefore demand should strengthen slightly.

After rising 4.3 per cent and 5.5 per cent respectively in 2007 and 2008, the New Home Price Index for Sudbury-Thunder Bay will rise in 2009 and 2010 but only modestly given the slowdown in demand.

Vacancy rates have come down steadily since 1998 in Thunder Bay while two bedroom rents are the lowest amongst other centres in Ontario. Lack of new supply and healthy demand due to strong enrolment numbers at Lakehead University and Confederation College contribute to the demand picture, not-to-mention in-migration from Northwestern Ontario from retirees and education and/or job seekers. CMHC expects the vacancy rate to fall again in 2009 to 1.6 per cent before increasing to 2.0 in 2010 as resale market activity picks up bringing households out of rental housing into homeownership. Rents should escalate in 2009 and 2010 given continued strong demand for rental accommodation.

Developers have plans for condominium in 2010 and beyond. A steady supply condominium units coming onto the market over the last twenty years has given Thunder Bay a nice mix of housing. This type and tenure of housing gives the city some allure, especially as empty nesters from the region look to retire to this city. Pricing will be very important as this product is primarily targeted at empty nesters who do not typically want to pay more for a condo than what they obtain from the sale of the family home or other homeownership unit.

After hitting a record high in 2008, Thunder Bay sales have fallen 18 per cent in 2009. July was the only month to register a year-over-year increase in sales. Sales will fall twenty per cent in 2009 and CMHC estimates a relatively small six per cent increase next year to 1,400 sales. Expect a gradually improving economy as low mortgage rates will positively impact the market next year.

The shortage of active listings in the Thunder Bay existing home market will exert pressure on prices. Although sales are still reasonably solid given last year’s all-time record in the Thunder Bay market, the sales to active listings ratio is unquestionably in a strong balanced to seller’s market position. The supply- demand relationship will cause price appreciation to continue barring some unforeseen economic shock. Watch for average prices to rise four per cent in 2009 and another four per cent in 2010.

Moishe Alexander’s Review

Highlights

Quebec City - Credit David Paul Ohmer, Flickr

Moishe Alexander says that the rental market tightened again this year in the Québec census metropolitan area (CMA). In fact, the vacancy rate fell from 1.2 per cent in October 2007 to 0.6 per cent in October 2008. Supply grew much less significantly as, this year, the area saw the addition of 467 units to the privately initiated rental housing stock, compared to 684 in 2007 and 771 in 2006. Zone 81 (Charny, Saint-Romuald, Saint-Jean-Chrysostome, etc.) still had the lowest vacancy rate, at 0.2 per cent.

Notice to readers

Starting this year, rental apartment structures serving senior clients exclusively will be excluded from the survey. For more information, see the Technical Notes section at the end of the report.

Rental market tightens in the Québec area

Moishe Alexander says that according to the results of the Rental Market Survey conducted by CMHC in October, the vacancy rate decreased in 2008, in the Québec census metropolitan area (CMA). From 1.2 per cent in 2007, the vacancy rate has now fallen to 0.6 per cent. In concrete terms, this means that, out of a stock of 70,740 rental housing units2, 433 apartments were vacant this past October. The limited rise in rental housing supply and a strong demand fuelled by the growth of the job market and the increase in net migration account for these results. Diverging trends were noted in Quebec’s six CMAs. While rental market conditions eased in the Sherbrooke and Trois-Rivières CMAs, the Gatineau, Montréal, Québec and Saguenay areas registered decreases in their respective vacancy rates. This fall, the Québec CMA had the lowest vacancy rate (0.6 per cent), followed by Saguenay (1.6 per cent), Trois- Rivières (1.7 per cent), Gatineau (1.9 per cent), Montréal (2.4 per cent) and Sherbrooke (2.8 per cent).

Strong demand

Moishe Alexander says that while the market had eased somewhat between 2002 and 2006, conditions have since been tending to tighten. The Québec area has been enjoying greater economic growth than the other CMAs, with a 3.1 per-cent increase in its gross domestic product in 2007. This is confirmed by the sustained job creation in 2007 (+9,100) and 20083 (+6,400). Investments in infrastructure and the activities for Québec City’s 400th anniversary effectively stimulated the labour market. In 2008, the non-residential construction has benefited from these conditions with strong gains in employment and hours worked across the area. During the first nine months of the year, 8,100 jobs were created in this sector: accommodation and food services; professional, scientific and technical services; finance, insurance and real estate; as well as transportation and communication. For the first nine months of the year, total employment growth reached 1.7 per cent in the CMA, and the increase extended to both full-time and part-time jobs. However, the rise in demand was not supported by the labour market situation for young people aged from 15 to 24 years, since the employment level was down for the first three quarters of 2008, compared to the same period in 2007. The greater demand was rather due to the increase in migration, fuelled by the good economic performance of the area. In fact, net migration in the CMA reached 4,170 people in 2006 and, even though the figures are not yet known, it is expected that the levels will again be high in 2007 and 2008. Newcomers from other regions across Quebec accounted for the greatest share (62 per cent). This strong migration to the CMA has been significantly boosting demand for rental housing.

Limited rise in rental housing supply

Moishe Alexander says the growth in supply weakened this year. In fact, the increase in the number of rental dwellings in privately initiated buildings reached 467 units in 2008, compared to 684 in 2007 and 771 in 2006.

Vacancy rates fall in most sectors of the CMA

Moishe Alexander says that vacancy rates fell in seven of the nine zones in the area. The rental market remained very tight on the South Shore (zones 8 and 9) and, even though conditions remained practically stable there in 2008, this sector still had the lowest vacancy rate in the CMA, at 0.2 per cent (zone 8). The vacancy rate in zone 9 (Lévis, Pintendre, Saint-Joseph-de- Lévis and Beaumont) eased very slightly in 2008, reaching 0.4 per cent, compared to 0.3 per cent in 2007. The greatest vacancy rate decrease was observed in zone 5 (Val-Bélair, Saint-Émile, Loretteville, etc.), where this rate fell from 1.7 per cent in 2007 to 0.4 per cent in 2008. The presence of the Valcartier military base and the development of Technopole Defence and Security has certainly accounted for the strong housing demand in this sector.

Vacancy rates on the decline in newer structures

Moishe Alexander says in the area, the sustained demand contributed to pushing down the vacancy rate for newer buildings. In 2007, structures built in 2000 or later had higher vacancy rates than older buildings, on account of their higher rents. This was no longer the case in 2008, as the vacancy rate for newer structures was 0.6 per cent. This year, structures built before 1960 had the highest vacancy rate, at 0.9 per cent. Overall, however, the vacancy rate was higher (1 per cent) for units renting for $1,000 or more per month. The strong demand for rental housing also led to a tighter market for smaller apartments, for which conditions are usually less tight. The vacancy rates for bachelor units and one-bedroom apartments fell in 2008, reaching 1.6 per cent and 0.9 per cent, respectively.

Estimated change in average rents

Moishe Alexander says in the CMA, the average rent for two-bedroom apartments rose by 2 per cent between the October 2007 and October 2008 surveys. The increase was below the rate of inflation observed over the same period for Quebec overall (2.3 per cent). It should be noted that CMHC now uses a measure (introduced in 2006) that estimates the change in rents charged in existing structures. This measure therefore excludes the impact of new structures and conversions added to the universe between surveys. In October 2008, the average rent for two-bedroom apartments reached $653 per month. The Québec CMA had the third highest average rent for units of this type, behind Gatineau ($677) and Montréal ($659). In the area, the highest average rent for two-bedroom apartments was observed in the Québec Haute-Ville sector, at $861 per month, while the Beauport sector had the lowest average rent for units of this type, at $587 per month for the period.

Availability rate

Moishe Alexander says the availability rate differs from the vacancy rate in that it includes not only the vacant units but also the units for which the existing tenant has given, or has received, notice to move, and for which a new tenant has not signed a lease. This rate reached 1.2 per cent in October 2008. The highest availability rates were recorded in the Québec Haute-Ville (1.9 per cent) and Basse- Ville (1.8 per cent) sectors and in the zone comprising Beauport, Sainte-Brigitte-de-Laval, Boischatel, L’Ange-Gardien, Château-Richer and L’Île-d’Orléans (1.8 per cent). The lowest availability rate was noted on the South Shore in the sector including Charny, Saint-Romuald and Saint-Jean-Chrysostome (0.2 per cent). These figures show that a small number of units would be vacated in the short term, which also reflects the lease cycle in Quebec, as most are signed for one year and renewed on July 1st.

Rental affordability indicator

Moishe Alexander says the rental affordability indicator is a gauge of how affordable a rental market is for those households which rent within that market. The new rental affordability indicator examines a three-year moving average of median income of renter households and compares it to the median rent for a two-bedroom apartment in the centre in which they live. More specifically, the level of income required for a household to rent a median priced two-bedroom apartment, using 30 per cent of its income4, is calculated. The three-year moving average of median income of households in a centre is then divided by this required income. The resulting number is then multiplied by 100 to form the indicator. An indicator value of 100 indicates that 30 per cent of the median income of renter households is necessary to rent a two-bedroom apartment going at the median rental rate. A value above 100 indicates that less than 30 per cent of the median income is required. In general, as the indicator increases, the market becomes more affordable; as the indicator declines, the market becomes less affordable. According to this indicator, the Québec CMA rental market became more affordable this year than in 2007. In fact, the indicator rose from 126 in 2007 to 135 in 2008. This means that the median income of renter households in the CMA was 35 per cent greater than the minimum required5 to pay the median rent. In 2008, the increase in the median income of renter households (+9 per cent) was greater than the rise in the median rent (+2 per cent).

Market to remain tight

Moishe Alexander says the last time the rental market was relatively less tight dates back to 1998, when the vacancy rate stood at 3.3 per cent. The beginning of the current decade was marked by rates reaching 0.3 per cent and 0.5 per cent. From 2002 to 2006, the market eased but, in 2007, the vacancy rate started another downward trend, reaching 0.6 per cent this past October. The situation will persist in 2009, as traditional rental housing construction has been idling, with volumes remaining well below the levels recorded in the last five years. In addition, the strong migration to the CMA has contributed to maintaining demand for dwellings of this type. Finally, despite favourable mortgage rates, there should be fewer renter households accessing homeownership, as a result of the economic slowdown and the less significant formation of young households in the area.

Secondary Rental Market Survey

Moishe Alexander says for the last two years, CMHC has expanded the Rental Market Survey to include information on rental condominium apartments in the following centres: Vancouver, Calgary, Edmonton, Toronto, Ottawa, Montréal and Québec. In the Québec CMA, the condominium apartment stock comprised 19,092 units in October 2008, compared to 18,526 units at the same time in 2007. The North Centre sector (zones 1 to 4) accounts for most (68 per cent) of these units. In the overall CMA, 8.4 per cent of the condominiums were rental dwellings (1,604 units) in October 2008, for a decrease from October 2007, when there were 1,701 rental condominiums, or 9.2 per cent of the condominium stock. This proportion was smaller on the South Shore, at 6.8 per cent in 2008, compared to 8.6 per cent a year earlier. The vacancy rate in the rental condominium segment followed the same trend as the rate on the traditional rental market. In fact, market conditions tightened, as the overall rental condominium vacancy rate fell to 1.3 per cent in October 2008, compared to 2.4 per cent in October 2007. The vacancy rates for rental condominiums differed from one sector to another in the area. In fact, the rates were 1.7 per cent in the North Centre and 0.6 per cent in the Northern Suburbs, while no rental condominium units were vacant on the South Shore. These results reflect the situation on the overall rental market in the area.

You can find the entire report in PDF format through the following link:
http://www.cmhc-schl.gc.ca/odpub/esub/64427/64427_2008_A01.pdf

Moishe Alexander’s Review

Toronto at Night - Credit Bensonkua, Flickr

The average apartment vacancy rate in the GTA declined to 2.1 per cent in 2008. Average fixed sample two-bedroom apartment rents increased by 1.7 per cent. Market conditions tightened in the rental market as ownership home prices continued to increase and employment growth moderated. Home ownership demand will continue to slow in 2009. The average apartment vacancy rate will be 2.0 per cent next year.

Factors Influencing Rental Demand

Rental market conditions in the Greater Toronto area (GTA) tightened in 2008. The average vacancy rate for purpose-built rental apartments declined to 2.1 per cent – the lowest level in seven years (see Figure 3). A number of factors contributed to the lower rental vacancy rate, including more moderate home ownership demand, steady in-migration, changing demographic trends and a dip in full-time jobs for young people.

Ownership Demand Moderated

A moderation in first-time buying activity in the GTA was one of the key factors underlying the decline in vacancy rates over the past year. CMHC’s Renovation and Home Purchase Survey found that the percentage of intended home purchases accounted for by first-time buyers declined to 40 per cent for 2008 compared to 47 percent in 2007. Local economic conditions became less certain in 2008, impacting the decisions of would-be first-time buyers. Potential first-time buyers are arguably more sensitive to changing ownership market conditions due to lower down payments and incomes, on average, and a lack of accumulated home equity. As a result, the outflow of rental households into home ownership slowed. In addition, some potential first-time buyers have also put their decision on hold due to the elevated cost of home ownership. Between 1997 and 2007, the GTA housing market experienced annual existing home price growth above that of consumer prices and average incomes. Over the last two years, the cost of home ownership became less manageable for first-time buyers who generally have incomes below the average. Even the relatively less expensive condominium apartment market segment, which has served as an entry point into home ownership for many first-time buyers, has become less accessible in some parts of the region. At the same time as the cost of home ownership was increasing, the cost of renting increased below the rate of growth for inflation and incomes. The gap between the average monthly mortgage payment and the average rent for the apartments in the GTA has widened, further prompting some renter households to put their home buying decision on hold. Rental demand for two and three bedroom unit types strengthened the most. The rental universe of two or more bedroom apartments actually increased this year, nevertheless the increase in demand outpaced the increase in supply. The gap between the average principal and interest payment for a condominium apartment and the average rent for an apartment likely widened more for larger unit sizes.

Weaker Full-Time Employment

One of the essential factors influencing renter-households’ decision to move into home ownership is a secure and well-paying job. While GTA labour market conditions remained tight, with job growth at two per cent in 2008, employment prospects for younger people weakened. Youth employment growth declined over the past year, with year-over-year gains only experienced in part-time jobs. Typically, individuals moving into ownership would require full-time employment to save for a down payment or to be approved for a mortgage. More renter households employed in part time positions had to hold off on home purchases. Demand for rental housing strengthened as a result.

Condominium Apartment Development

Pre-construction sales of condominium apartments have been very strong since the early new millennium, when vacancy rates began increasing. In 2007, a record number of pre-construction highrise sales took place. However, while a pre-construction purchase was the first step towards home ownership for many renter households, many of these condominium apartment units have not actually completed. Condominium apartment completions increased in 2008 (see Figure 6). However, over the same period, the average number of condominium apartments under construction increased from the mid-20,000 range to the mid-30,000 range. There are still many households continuing to rent that will be moving once their new ownership housing completes. As will be discussed further in the forecast section of this report, movement from rental into completed condominium apartments will put a floor on the degree to which vacancy rates will move lower over the next year.

Immigrants Fuel Rental Demand

In 2008, the number of immigrants settling in the Toronto area trended higher, contributing to increased demand for rental housing. In 2007, the Citizenship and Immigration Canada raised the target for new permanent residents to Canada by more than five per cent, the highest increase in the past 15 years. Immigration continues to be the driving force behind sustained positive net-migration into the GTA. Immigrants have been attracted to the GTA by the healthy economy, variety of employment opportunities and strong ethnic and cultural networks. Many immigrants tend to rent when first arriving in the GTA, rather than entering home ownership directly. Once they gain quality employment, establish a credit history and accumulate a sufficient down payment, many recent immigrants will move into home ownership. However, the steady inflow of immigrant households into the GTA serves to fill the gap left by the movement of some newcomers into home ownership.

Sub-Market Highlights – Rental Demand Varied by Neighbourhood

Because the Greater Toronto is a very large metropolitan area – the largest in Canada and in the top ten in North America – rental market conditions vary considerably by submarket (see Figure 7). For example, the former City of Toronto has always been popular choice with renter households since it offers a diversity of amenities, services, cultural attractions, educational institutions and employment opportunities. Furthermore, the area includes a variety of transportation alternatives. Renters pay aboveaverage rents for these benefits, but are willing to due so as evidenced by the below-average vacancy rates in the Former City. While the amenities available in the Former City are a key factor explaining below-average vacancy rates, home prices are another factor influencing rental demand. Average home prices in the former City of Toronto are the highest in the GTA. Average rents are also above the GTA average, but not by the same proportion. This means that the gap in household income required to own versus rent is wider in the Former City than for the GTA as a whole. Many households opting to live in the former City of Toronto have arguably chosen to rent as a result. Strong rental demand in the Former City pushed the vacancy rate down to 1.5 per cent from 1.8 per cent in 2007. Other regions of the GTA, such as Durham, actually experienced a softening in rental market conditions with rising vacancy rates. Home ownership is in greater competition with rental in many parts of Durham. Below average home prices relative to the GTA as a whole and low mortgage rates have kept home ownership affordable in the area and supported an outflow of households from rental.

Vacancy Rate Lowest for Most Expensive Units

Following the trend observed over the past three rental market surveys, the lowest vacancy rates in the GTA are observed for the most expensive apartments – those commanding rents over $1,000 (see Figure 8). Average rents have been growing modestly since vacancy rates increased strongly early in the new millennium. Those renter households whose incomes grew in excess of average rents have been able to trade up in the rental market, from mid-range apartments to more expensive units with a higher level of finishings and amenities. As will be discussed later in this report, this same trend has also resulted in some renter households switching from purpose-built rental accommodations to comparatively higher end investor-held condominium apartments available for rent.

Vacancy Rate Increases for Newer Rental Buildings

Between July 2007 and June 2008, over 1,400 new rental units completed with over 40 per cent of these completions taking place in the City of Brampton. The result was an increase in the vacancy rate for newer rental apartments. Given that over 70 per cent of the completions took place in the first and second quarters of 2008, many, if not all of these properties are still “renting up”. It makes sense that these new additions to the rental stock have not yet achieved occupancy levels in line with the GTA rental market as a whole. The higher vacancies experienced by new properties resulted in the increase in the average vacancy rate for those units completed after 1990.

Little Change in Rental Supply

While over 1,400 rental apartments were completed last year, Toronto’s private rental apartment universe remained almost unchanged. Over the same July 2007 to June 2008 period, approximately the same number of units were taken out of the rental universe for reasons such as condominium conversions, demolitions, renovations and sales. With little change in rental supply and stronger demand for rental housing, the number of vacant units shrunk to the lowest level in the past seven years.

Rent Growth In Line With Inflation

CMHC measures annual changes in average rents based on a method that compares rental structures that were common to both the 2007 and 2008 survey years. This eliminates the compositional impact of new structures coming into or being removed from the rental market universe. This approach allows for an analysis of average rent fluctuations resulting from changing market conditions. In 2008, the average two-bedroom fixed sample rent increased by 1.7 per cent, which was almost in line with the general rate of inflation. Over the same period, the cost of ownership increased at the higher rate. The comparatively lower cost of renting helped tighten demand for the rental accommodations.

Rental Affordability Index

According to CMHC’s new rental affordability indicator, affordability in Toronto’s rental market remained in line with the last four years, during which time the indicator ranged between 89 and 91. The indicator dipped slightly from 91 to 90. Median rents grew at a moderately higher rate than median renter household income (see Figure 9). The rental affordability indicator is a gauge of how affordable a rental market is for those households which rent within that market. A generally accepted rule of thumb for affordability is that a household should spend less than 30 per cent of its gross income on housing. The new rental affordability indicator examines a three-year moving average of median income of renter households and compares it to the median rent for a two-bedroom apartment in the centre in which they live. More specifically, the level of income required for a household to rent a median priced twobedroom apartment, using 30 per cent of its income, is calculated. The threeyear moving average of median income of households in a centre is then divided by this required income. The resulting number is then multiplied by 100 to form the indicator. An indicator value of 100 indicates that 30 per cent of the median income of renter households is necessary to rent a twobedroom apartment going at the median rental rate. A value above 100 indicates that less than 30 per cent of the median income is required to rent a two-bedroom apartment, conversely, a value below 100 indicates that more than 30 per cent of the median income is required to rent the same unit. In general, as the indicator in- creases, the market becomes more affordable; as the indicator declines, the market becomes less affordable. Please refer to the Methodology section at the end of this report for detailed information on the indicator.

Rental Market Outlook for 2009

The overall apartment vacancy rate will level off at 2.0 per cent in 2009. The average two-bedroom rent will increase by 2.0 per cent. Softening home ownership demand will keep the apartment vacancy rate low compared to what has been experienced for the majority of the new millennium. Rising home prices coupled with more moderate employment growth will continue to keep some would-be home buyers, especially first-time buyers, on the sidelines, deferring entry into home ownership beyond 2009.  The impact of more moderate demand for home ownership, however, will be mitigated by the continuation of strong condominium apartment completions. Many condominium apartments currently under construction were purchased by renter households at the pre-construction stage of development. Over time, condominium apartment starts and completions should follow a similar path. However, since mid-2007, a gap between starts and completions has developed (see Figure 10). As more of these units complete next year, this gap will narrow. Some renter households will vacate their current dwellings to move into home ownership for the first time. Completed condominium apartment developments will also contain investor- held units for rent. Some households living in purpose-built rental apartments will be attracted to the higher level of finishings and amenities offered by brand new condominium developments.

Secondary Rental Market

CMHC also surveys the secondary rental market The secondary rental market survey for the GTA includes information on condominium apartments offered for rent as well as the following additional rental housing types: rented single-detached houses, rented double (semi-detached) houses; rented freehold row/town houses; rented duplex apartments; rented accessory apartments; and rented apartments which are part of a commercial or other type of structure containing one or two dwelling units. The methodology section at the end of this report provides more detailed information on the Secondary Rental
Market Survey.

Condominium Apartment Rental Market

The condominium apartment market remains an important component of the secondary rental market. The total number of apartments, registered under condominium corporations in the GTA, rose by nearly four per cent to 234,303 in 2008. During this period, the number of condominium apartments designated as rental (i.e. units held by investors that are either occupied or vacant), rose by almost six per cent to 44,051 (see Figure 11). Thus, the share of condominium apartments held by investors edged upward slightly to 18.8 per cent – still well-below the levels experienced in the mid-1990s, when approximately one-third of the registered stock was investor-held. While the number of condominium apartments available for rent increased over the past year, their popularity increased as well. The GTA vacancy rate fell to 0.4 per cent in 2008 compared to 0.7 per cent in 2007 (see Figure 12). This vacancy rate is significantly lower than that for purpose-built rental apartments. The reason for the relatively tight conditions in the condominium apartment rental market is twofold. First, the rising cost of home ownership has prompted some households to choose renting versus owning, at least in the short term. Second, condominium apartments offer, in many cases, a higher level of finishings and amenities than the average purposebuilt rental unit. Many renters have been willing to pay a premium to take advantage of better quality and more modern rental apartments.

High-Rise Condominiums Most Popular Rental Type

Larger condominium apartment buildings experienced the lowest vacancy rates. The lowest average vacancy rate of 0.1 per cent was recorded for rental buildings with 300+ units, even while the total number of rental units in these buildings increased by 9 per cent. Many larger projects have completed over the past two years. Typically larger developments benefit from a larger array of amenities that could prove attractive to renters, including larger workout/gym facilities, cinemas and well-outfitted party rooms.

Higher Rents Have Not Deterred Renters

The higher rents charged for rental condominium apartments have not kept renters away from this housing type. The average condominium apartment vacancy rate is 0.4 percent compared to 2.1 per cent for purpose-built rental units. The average two-bedroom rent for a condominium apartment in the GTA is $1,615 compared to $1,078 for the same unit type in a purpose-built rental. Superior quality and valuefor- money often associated with modern condominium apartments trumps lower rents offered in the primary rental market.

Other Secondary Rental Housing Types

The secondary rental market consisting of rental single-detached and semi-detached homes, town houses, duplexes and accessory suites represent a large component of the general rental market in the GTA. The total number of rental units in the secondary rental market was estimated at 153,053 (or approximately a third of the total stock available for rent) in 2008. The average rents for other secondary rental housing types falls more in line with average rents charged for purpose-built rental apartments and thus lower than average rents realized for condominium apartments. The average purpose-built twobedroom apartment is $1,082 compared to $1,083 for all secondary rental market types other than condominium apartments. Similar to the purpose-built rental market, unit size, quality of finishing and location are the likely reasons for the difference in average rents between condominium apartments and other secondary rental types.

You can find the entire report in PDF format through the following link:
http://www.cmhc-schl.gc.ca/odpub/esub/64459/64459_2008_A01.pdf