Moishe Alexander and Canadian Funding Corporation Review CMHC Reports

Posted by Moishe Alexander

Highlights – Gatineau

According to the results of the latest CMHC Rental Market Survey, the rental housing vacancy rate in the Quebec part of the Ottawa-Gatineau CMA reached 2.2 per cent in October 2009, up by 0.3 of a percentage point over a year earlier. The rental market therefore eased but still remained relatively tight. The proportion of vacant units in the metropolitan area was in fact slightly lower than the average for Quebec overall (2.3 per cent). The relative stability of the vacancy rate in the Gatineau area was attributable to the fact that the continued homeownership trend was counterbalanced by strong migration.

Gatineau was not the only area where the rental market showed little change, however, as this was also the case in the Montréal, Québec and Saguenay CMAs. On the other hand, conditions eased in Sherbrooke and Trois-Rivières, two areas where the job losses among young people slowed the rate of household formation. Lastly, in the Ontario part of the Ottawa-Gatineau CMA, the proportion of vacant units remained below the level recorded in Gatineau, rising from 1.4 per cent in October 2008 to 1.5 per cent a year later.

The small rise in the vacancy rate recorded in the Gatineau area was due in part to the job losses that occurred over the past year. Following a particularly good year for job creation in 2008, with an annual gain of more than 5 per cent, the first ten months of 2009 were marked by the elimination of some 5,000 positions compared to the average level for 2008. As is often the case in difficult economic times, the youngest workers sustained the greatest losses, with the average number of jobs among people aged from 15 to 24 years falling by about 4,000 between 2008 and 2009. The slightly tougher labour market conditions therefore limited household formation in this age group and removed some pressure on rental housing demand.

The homeownership trend also contributed to the increase in the vacancy rate in 2009. Despite the economic uncertainties that prevailed at the beginning of the year, the low mortgage rates and the contribution of the public service to the regional economy helped maintain housing starts at high levels. As well, the Gatineau area saw the construction of record numbers of row homes, semi- detached houses and condominium apartments–all housing types that are more affordable than single-detached homes and often preferred by renters accessing homeownership.

However, migration limited the easing of the rental market. In fact, the latest migration data released by Statistics Canada revealed that, between 2007 and 2008, there were 2,800 more in-migrants than out-migrants. It should be specified that, just like in previous years, it was the international component of net migration that contributed the most to the demand for rental housing. During this period, more than 1,000 new residents came from abroad. This trend likely continued in 2008/2009.

Just like the overall metropolitan area, the Aylmer sector did not register a significant change in its vacancy rate compared to October 2008. It should be noted that Aylmer was the sector with the highest proportion of unoccupied apartments in the Gatineau area. In fact, 5 per cent of the apartments there did not have occupants this past fall, compared to 5.2 per cent a year earlier. In the other sectors, the vacancy rates all varied within a narrow range from 1.6 per cent to 2.6 per cent. The difference between these rates and the rate in Aylmer was likely due, firstto the higher rents in this sector and, second, to the steady homeownership trend there. In fact, Aylmer registered the largest volume of homeowner housing starts in the area. A number of renters who already lived in this sector certainly contributed to the surge in property sales there and to the fact that Aylmer once again had the highest proportion of vacant rental units in the metropolitan area.

In Hull, which has more than half of all the rental housing units in the Gatineau area, the vacancy rate remained unchanged, at 1.6 per cent, in October 2009. The popularity of this sector is attributable to its proximity to Canada’s capital and to the presence of institutions of higher learning. Despite the job losses observed among young people since the fall of 2008, which may have caused some not to renew their leases in July, the increase in student enrolment at the Cégep de l’Outaouais and the Université du Québec en Outaouais seems to have helped landlords rent out their available units. In fact, enrolment at these two institutions rose again this past fall. The gain was 3.3 per cent at the Université du Québec en Outaouais while, at the Cégep de l’Outaouais, enrolment reached a record level, mainly thanks to the recent addition of new health programs.

In the Gatineau sector, the proportion of vacant apartments reached 2.6 per cent in October 2009, up from 1.7 per cent in October 2008. Market conditions also eased in the outlying area, where the percentage of unoccupied units rose from 1.3 per cent in the fall of 2008 to 2.3 per cent this past fall. The arrival of many apartments in these sectors during the last year increased the supply of units. In fact, 87 rental dwellings were added in the outlying area between July 2008 and June 2009, compared to 16 the year before. The continued homeownership trend also caused some rental housing units to be vacated, a number of which were still unoccupied in October 2009.

Tags: area, Aylmer, Canada, cent, fact, Gatineau, homeownership, housing, Hull, Market, October, Ontario, proportion, Quebec, rate, sector, trend, vacancy, year
Posted in CMHC, Canada, Ontario, moishe alexander