Higher demand for rental units helped push the vacancy rate in Saskatoon lower, the Canada Mortgage and Housing Corp. (CMHC) said Wednesday.
According to CHMC’s Rental Market Report, the vacancy rate in the city declined to 5.7 per cent in October 2019 from 8.3 per cent the previous year.
It is the third consecutive year the rate has dropped.
CMHC said occupancy growth outpaced supply expansion, resulting in the vacancy rate decline.
“Strengthening demand relative to supply put downward pressure on rental vacancies in 2019,” said Goodson Mwale, a senior analyst with CMHC.
The report said Saskatoon’s economy added 5,600 jobs during the year, however, affordability challenges due to the mortgage stress test and rising interest rates “resulted in some households turning to the rental market for their accommodation needs.”
Only 79 new units were added to the market from October 2018, but CMHC said over 500 rental apartment units were at various stages of construction in October 2019.
The average rent increased by 2 per cent during the survey period, led by a spike in the rental price of three-bedroom apartments by over 4 per cent to $1,280.
The average rent for a two-bedroom unit increased to $1,129, while a one-bedroom unit increased to $980.
“Nonetheless, the 2019 survey results also indicated lower average asking rents for vacant units than in occupied units,” the report said.
The condominium vacancy rate declined to 1.7 per cent in October 2019, down from 4.7 per cent the previous year.
CMHC said with the supply of condos increasing by 4.4 per cent during the survey period, “the vacancy rate moving lower highlights strengthening demand for rental condominiums in 2019 as an alternative to homeownership.”
The average cost of a two-bedroom condo was $1,179, slightly higher than for a two-bedroom apartment. CMHC said condo apartments are typically newer and often include various amenities, resulting in the cost difference.