No Christmas miracle in the rental market

CMHC delivered an early Christmas present a couple weeks ago, publishing the (inexcusably infrequent) annual rental market report a month early. This is the most in-depth view of the rental market, and the only official source for key figures like vacancies, rental market turnover and average rents (not just listings, but actual rents paid).

Unfortunately, the report still shows a rental market under considerable stress. The most important data point, the vacancy rate, ticked up from a critically low 1% to a still-bad 2.1%. That small easing is probably the best “good” data point in the release. But it remains too low, and below the 3% threshold where tenants can start picking landlords, as opposed to landlords picking tenants.

Meanwhile, average rents increased 6% year over year (4.8% if you compare using the same apartments - excluding new builds) to $1,400. It’s much less than in 2023, but still far too high to cheer.

On the negative side - there’s been no increase in the turnover rate. It remains at a decade low of 10%. Having only one in ten units change hands, especially in a market with lots of transient university students, suggests that many renters are still “stuck” in their units. Years into the housing crisis - we should expect - and hope for a lot more movement as peoples life conditions changed considerably since 2019.

In part, this reflects the relatively good deal that your current unit might offer - the rent cap has protected many renters from the worst of the rent increases, but only if you don’t move. The rental market report shows that clearly; while occupied units have average rents of $1,621, vacant units have rents of $2,068 - a 28% gap.

The data is as of October, so it’s just catching the start of the federal governments shift in immigration policy. But it is interesting to see that the largest increases in the vacancy rate in Nova Scotia was in Cape Breton, where caps on international students at CBU will bite more significantly. Make sure to subscribe to find out what happens in next years report twelve months from now!