Vacancy rate lower than ever, at 1.5%, and average rent increase of 8% in one year: the housing crisis will worsen in Canada in 2023, in virtually all major cities, from Montreal to Toronto via Quebec.
According to the Rental Market Report published this Wednesday by the Canada Mortgage and Housing Corporation (CMHC), this deterioration of the picture took place while the supply of new housing has nevertheless increased, “but not strongly enough to follow demand on the rental market,” we can read.
None of the 17 Canadian cities analyzed presented a balanced market in 2023, which favors neither owners nor tenants, and whose vacancy rate should be between 3 and 4%. Around ten cities are even below the 1% rate. In Quebec, Trois-Rivières (0.4%), Drummondville (0.5%) and Quebec (0.9%) find themselves in this situation.
In Montreal, the vacancy rate increased from 2% to 1.5% in one year. In 2023, it reached the Canadian average.
$1096 for two bedrooms
Rents followed an opposite curve, with an average increase of 8% for all of Canada. There is a big disparity here from one city to another. In Quebec, the average rent increase for a two-bedroom unit was 4.8% in one year, while it was 7.9% in Montreal. In Quebec, the Sherbrooke metropolitan region was the most affected, with an increase of 9.8%. The Canadian champion in this regard was Calgary, with an average increase of 14.3%.
The average rent for a two-bedroom apartment, according to CMHC, now stands at $1,040 in Quebec and $1,096 in Montreal.
However, supply increased in almost all of the urban markets studied, by 1.7% for all of Canada and 1.8% in Montreal. But this increase was insufficient to absorb the increase in demand, the report notes. “Strong growth in immigration and employment has increased the demand for rental housing nationally,” it explains.