Renters are having an easier time finding accommodations in Victoria this year. A sluggish local economy and labour market, and a recent surge in homeownership has moved vacancy rates up. As the level of employment has edged lower, relatively fewer people have moved to the region. Historically low mortgage rates and lower home prices reduced monthly mortgage carrying costs, and encouraged some renters to exit the rental market in favour of homeownership. Near record levels of apartment condominium resales recorded across Greater Victoria during the second and third quarters of 2009 reflected this movement from rental to homeownership.

Vacancy rates for both apartments and town homes moved up in the Victoria CMA over the past year. The average apartment vacancy rate edged up to 1.4 per cent, following four years at 0.5 per cent. Similarly, the average vacancy rate for rental townhouses shifted up from 0.1 per cent last October, to 1.8 per cent in October 2009. The trend of increasing vacancies was widespread in the region. Higher vacancy rates were observed across all Greater Victoria municipalities. Both the one and two bedroom segments of the local apartment rental markets recorded increased vacancies. While apartment vacancy rates in Victoria increased in 2009, they remain low compared to other major British Columbia markets (2.1 per cent in the Vancouver CMA and 3.0 per cent in the Kelowna CMA) and the provincial average (2.8 per cent).1

Softer demand for rental housing in 2009 has put less upward pressure on rents. Average one and two bedroom apartment rents edged up 4.5 and five per cent in 2009, respectively.2 This growth was less robust than the 6.8 per cent average rent increase in 2008, when vacancy rates were at their lowest. A substantial range exists between the rents observed across Victoria CMA municipalities. For an average two- bedroom apartment, Oak Bay was home to the highest rents ($1,206), while the lowest rents were found in Esquimalt ($858). When compared to the provincial average, two-bedroom rents are on par, while average one- bedroom rents are eight per cent lower in Victoria.

Innovative approaches developed by the private sector, not-for-profit sector and all levels of government are increasingly driving the production of affordable housing, particularly for low-income households, reports the 2009 Canadian Housing Observer, released today by Canada Mortgage and Housing Corporation (CMHC).

“The 2009 Canadian Housing Observer is unique in providing a comprehensive annual examination of the key factors influencing the development of housing, a vital sector for Canada,” said Karen Kinsley, President of CMHC.

The 2009 Observer, CMHC’s flagship publication, details the private sector’s innovations in producing affordable housing, including providing direct support to tenants or homeowners through interest-free loans and measures to reduce housing costs through creative approaches to design, construction and renovation.

For their part, not-for-profit organizations are finding ways to provide affordable housing without on-going government support. For example, the Habitat for Humanity model is based on the concept of “partnership housing” where the potential homeowners contribute sweat equity and work alongside community volunteers and businesses to build homes.

Some municipal governments are also adopting new housing policies, including housing trust funds, donating land for affordable housing and reducing or waiving municipal fees.

Underpinning these efforts is support from federal and provincial/territorial governments, through flexible agreements that allow for innovative ideas, as well as financial and in-kind contributions.

Other key findings in this year’s Observer include:

* Nationally, the incidence of core housing need decreased from 13.7 per cent in 2001 to 12.7 per cent in 2006, with most regions in the country following the national trend;
* The effects of the aging of Canada’s population over the next three decades and the important implications this will have on homebuilders, mortgage lenders and policy makers;
* The effect of immigration on population and household growth will become increasingly important;
* Housing starts were above the 200,000 unit level for the seventh consecutive year and housing-related spending contributed just over $300 billion to the Canadian economy in 2008;
* A water-sensitive approach to urban design is an important part of efforts to encourage the development of healthy, energy-efficient sustainable homes and communities.

In addition to the Observer, CMHC offers detailed online statistical housing information and analysis. This includes CMHC’s Housing in Canada Online interactive tool.