Renters in Canada are facing the toughest market in decades with low vacancies, higher prices and surging demand, according to the Canada Mortgage and Housing Corporation (CMHC).
The housing agency released its annual rental market report Thursday, which showed that the national vacancy rate for purpose-built rental apartments declined to 1.9 per cent last year — the lowest level since 2001.
Meanwhile, the demand for rentals outstripped supply due to higher net migration, the return of students to on-campus learning and a rise in homeownership costs.
“Higher mortgage rates, which drove up already-elevated costs of homeownership, made it harder and less attractive for renters to transition to homeownership,” CMHC said in a statement.
CMHC data also showed that the average rent for two-bedroom units that were occupied by a new tenant rose by 18.3 per cent — well above the average rent growth for units without turnover. This made it difficult for Canadians trying to enter the rental market or find new housing to rent, the agency said.
“Lower vacancy rates and rising rents were a common theme across Canada in 2022,” Bob Dugan, CMHC’s chief economist, said in a statement.
“This caused affordability challenges for renters, especially those in the lower income ranges, with very few units in the market available in their price range.”
The average rent for a two-bedroom rental condominium apartment saw a significant increase to $1,930 from $1,771, about nine per cent year over year, according to CMHC.
Canada is also facing a housing crunch with a shortage of both homes and construction workers to build new units.
Another CMHC report released last week found that the annual rate of new home building had slowed by five per cent in December 2022 compared with November.
Last month, in a bid to help tackle skyrocketing rents across the country, the government of Canada opened applications for a one-time top-up as part of the Canada Housing Benefit (CHB) program — an initiative that would put $500 in the pockets of low-income renters.