CMHC's 2024 rental market report
Improving, but Metro Vancouver's vacancy rate is still well below 3%
CMHC publishes a Rental Market Report each year, describing rental markets in metro areas across the country. The latest report, describing the market in October 2024, was released last Thursday.
The chart above compares vacancy rates from the 2023 and 2024 reports. A vacancy rate of 3% is healthy: below that, rents rise quickly, forcing people out. 2023 was pretty terrible. A year later, vacancy rates have improved, although most cities are still below 3%. Metro Vancouver is at 1.6%.
Vacancy rates in Metro Vancouver, as of October 2024:
The report describes the overall situation as rental supply outpacing strong demand.
Demand remained high. However, the highest supply growth in over 3 decades outpaced it, resulting in higher vacancy rates and a cooling in rent growth in many urban centres.
Calgary and Edmonton saw the largest increases in rental completions, resulting in the highest vacancy rates among major CMAs (Figure 2, showing completions up to June 30). Many of these completions occurred in the second half of the year.
Montréal’s rental apartment completions remained among the highest on record, surpassing those of any other CMA despite a decline from the record levels seen in 2023.
Vancouver’s completion rate looks close to the 10-year average.
On the demand side, new caps on international students have reduced population growth in the second half of the year. The economy is slowing somewhat, reducing the number of younger people (<25) who are able to move out on their own, but demand from people aged 25-44 is still strong. Unaffordably high home prices in Toronto and Vancouver are a factor pushing up rental demand, compared to Edmonton and Calgary, where home ownership is a more affordable alternative.
The report also observes that vacancy rates for condo apartments which are rented out by individual landlords tend to be significantly lower. For example, in Kitchener-Cambridge-Waterloo:
Condominium apartment vacancy rates in KCW continued to be much lower than in the purpose-built rental market (0.4% vs. 3.6%). This difference was partly due to condominium apartment owners prioritizing quicker rental turnover, contributing to lower vacancy rates. These owners were more willing to make concessions to rent their units than landlords in the purpose-built market, as they had less capacity for financial losses.