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.

New home construction in the Winnipeg CMA will move upward in 2010 following a slower year for builders in 2009. Local builders are on pace to start 1,925 homes in 2009, a decline of 36 per cent from 2008, before production will move up 25 per cent to 2,400 units in 2010.

To the end of September 2009, total starts are 33 per cent below the same period in 2008, with 1,504 foundations poured compared to 2,247 during the first nine months of 2008. This reduction has been a response to elevated inventories in both the single-detached and multi-family markets as well as a lower level of demand created by the economic uncertainty that existed over the first half of the year.

Given demographic patterns in the Winnipeg CMA, both 2009 and 2010 will see the rate of household formation in the city surpass housing starts. Lower starts to adjust for heightened inventories are necessary to bring levels in line with long term averages and the new home market into balance again.

The single-detached sector will finish 2009 with 1,425 starts, down more than 26 per cent from 2008. Activity will rebound in 2010 when 1,600 starts will be recorded, 12 per cent more than 2009. Price growth will remain positive, but modest, with the New House Price Index rising 2.5 per cent in 2009 and 3.0 per cent in 2010.

While the number of single-detached units under construction has recently moved slightly below the ten-year average at 691 units, the number of complete and unabsorbed units remains high by historical standards at 199 units. That compares to a ten-year average of 169 units. Nonetheless, the decline in starts earlier in the year has allowed for the absorption of many complete and unabsorbed units, which reached their peak of 301 units in November of last year. Despite the recent decline in inventory, builders have been hesitant to start new spec units given current market conditions.

The challenges faced by builders in 2009 are underscored by the 1,053 single starts recorded through September, a decline of 28 per cent from the same period in 2008.

Welcome to the HomeZilla Real Estate Trends. As in previous months, we list the most searched provinces, top 10 most searched cities and top 10 most searched amenities.

HomeZilla’s Most Searched Provinces

1			Ontario
2			British Columbia
3	(+1)		Nova Scotia
4	(-1)		Alberta
5			Manitoba
6	(+1)		New Brunswick
7	(-1)		Quebec
8	(+2)		Newfoundland
9	(-1)		Saskatchewan
10	(-1)		Prince Edward Island

HomeZilla’s Most Searched Cities

1			Toronto
2	(+1)		Ottawa
3	(+1)		Mississauga
4	(-2)		Vancouver
5	(-)		Quesnel
6	(-)		Oshawa
7	(-2)		Calgary
8			Brampton
9	(-)		Winnipeg
10	(-)		Whitby

HomeZilla’s Most Searched Amenities

1			Schools
2	(-)		elementary schools
3	(-1)		grocery stores
4	(+3)		child care services
5	(-1)		coffee shops
6	(-)		high schools
7	(+2)		banks
8	(-3)		pubs
9	(-6)		parks
10	(-)		jr high schools

We hope you enjoy these March 2009 real estate trends and we look forward to your feedback!

Interesting report added by Moishe Alexander, CFC CEO

Winnipeg - Credit jimj_wpg, Flickr

Winnipeg Manitoba has had a serious decrease in housing starts and is returning to the historical low levels of housing starts of years gone by and the housing starts are down 15%. CMHC is forecasting 2,875 units single-detached starts, 25 semi-detached units, 15 apartment condominium ownership units, and 20 apartment rental units, for a total of 2,935 housing starts for 2008. This will decrease by 700 units in 2009.

SINGLE-DETACHED FORMS OF HOUSING POISED FOR ANOTHER STRONG YEAR

This year Canada Mortgage and Housing Corporation predicts that Winnipeg will surpass the housing start levels of 2006, and 2007 but pouring more than 1,925 foundations. However, in 2009 Canada Mortgage and Housing Corporation predicts that there will be only 1,850 single-detached homes started. A modest 4% decrease from 2008.

WINNIPEG’S RESALE MARKET WILL BE MODERATE

Canada Mortgage and Housing Corporation states in its outlook report that after 6 years of consecutive double-digit price growth, the resale market in Winnipeg will balance itself off in 2009. In 2007, the average MLS price for a detached home is currently $200,000.00 in 2008 and we will see a 4% increase in 2009, to push the resale average price to $208,000.00.

WINNIPEG MOVING TO BALANCED MODERATE MARKET

As Winnipeg has experienced substantial price growth over the past 3 years, Canada Mortgage and Housing Corporation predicts that there will be continued but moderate growth in 2009. However, in major commercial projects there will be over $7 billion worth of projects that are commencing in 2009 for Winnipeg and the surrounding areas, concentrated in Winnipeg.

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 Winnipeg and surrounding areas.

You can find the entire report in PDF format through the following link:
http://www.cmhc-schl.gc.ca/odpub/esub/64363/64363_2008_B02.pdf

Winnipeg, Manitoba - Credit Daryl Mitchell, Flickr

The Winnipeg Manitoba rental market has one of the lowest apartment vacancy rates at 1.0% in the country. In fact, the rental town house vacancy rate dropped substantially from 2.6% to 2.2% for 2008. These two figures together leave a net vacancy rate of 1.0%.

Moishe Alexander states that it is tough times for tenants in Winnipeg Manitoba to find any proper rental accommodations, as there are line-ups at the Property Managements offices.

AVAILABILITY RATE DECLINES ALONGSIDE VACANCY RATE

The Canada Mortgage and Housing Corporation reported that Winnipeg Manitoba is experiencing an availability increase for rental housing in all sectors. Much of this is contributing to the demand by the significant post secondary population in the area along with a strong local labor market, especially high-tech jobs. These statements and figures come from the rental market report issued in 2008 by Canada Mortgage and Housing Corporation. More than 12,000 people (net migration) moved to Winnipeg Manitoba last year from other provinces and countries putting additional stress on an already stressed out rental housing market.

VERY LITTLE NEW SUPPLY OF PURPOSE-BUILT RENTAL UNITS OR ANY HIGH RISE RENTAL UNITS IS AFFECTING THE VACANCY RATE

According to Canada Mortgage and Housing Corporation, despite the extreme demand for rental housing in Winnipeg Manitoba, only 68 purpose-built rental starts occurred in Winnipeg Manitoba and surrounding areas for the first 10 months of 2008. This has caused a panic for tenants and an extreme appreciation in value for single detached homes in Winnipeg Manitoba.

SEVERAL REASONS FOR CONTINUED LOW VACANCY RATE

The Canada Mortgage and Housing Corporation report states that many factors have combined to keep Winnipeg Manitoba vacancies low. Even though there has been falling commodity prices for iron or the mining sector, it has kept demand solid for rental accommodations. Migration continues into the region, attracted by the jobs, post secondary school opportunities, and retirement living. Winnipeg Manitoba boasts substantial investments in the high-tech consumer industry and all main hospitals for Manitoba that are fully operational, are situated in Winnipeg.

RENTS CONTINUE TO INCREASE

The Canada Mortgage and Housing Corporation report states that last fall in Winnipeg Manitoba, a one-bedroom apartment that used to rent for $740.00, plus utilities, is now renting for $769.00, plus utilities, compared to the same period last year. A two-bedroom unit that rented last year for $475.00, plus utilities, is now renting for $745.00, which is approximately a 45% increase.

Government sources say that with this increase cost, welfare recipients are starting to be hard pressed to rent anything in Winnipeg or surrounding areas, except in the Lord Selkirk area. Tight vacancy rates in this area of the province have caused rents to increase substantially for the same period last year. However, rent increases in purpose-built apartment rent units were moderate in most areas of the city including Lord Selkirk and Fort Garry.

VACANCY RATE DECREASES IN ROW RENTALS

Canada Mortgage and Housing Corporation is projecting that vacancy rates in Winnipeg Manitoba and surrounding areas in row rentals will remain the lowest in the country in 2009. Mainly due to non-construction of rental units and a significant increase in migration. In fact, Canada Mortgage and Housing Corporation is predicting that the vacancy rate in Winnipeg Manitoba and surrounding areas will decrease from 2.6% to 1.5% for the period ending 2009.

WINNIPEG’S RENTAL AFFORDABILITY INDICATOR

Canada Mortgage and Housing Corporation affordability indicator will decline to 105 by year-end 2008, which indicates that the value of 100 suggests that 40% 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 Vancouver and Abbotsford 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/64479/64479_2008_A01.pdf