The rental market continued to tighten in Quebec last year, with the exception of the central neighborhoods of the island of Montreal, hard hit by the pandemic.
Posted yesterday at 5:44 p.m.
The rental housing vacancy rate remained stable in the Montreal area and in Canada as a whole in 2021, according to the Rental market report, released Friday by Canada Mortgage and Housing Corporation (CMHC). The national vacancy rate is 3.1%. That of Montreal is 3%, that of Quebec 2.5% and that of Gatineau 1.1%.
Strong rental housing construction in 2021 has helped stabilize the situation, says CMHC. In fact, more than 35,000 rental units were built in Quebec last year, an absolute record, according to the Association of Construction and Housing Professionals of Quebec.
However, about half of the province’s 42 agglomerations and metropolitan areas have seen a drop in the vacancy rate, noted Véronique Laflamme, spokesperson for the Front d’action populaire en réménagement urbain (FRAPRU), who spent the day view CMHC data files.
Almost all sectors, with two exceptions, have a housing availability rate of less than 3%. This level is often considered as an equilibrium market rate, that is to say that it favors neither tenants nor owners.
In the opinion of M.me Laflamme, the report confirms that the housing affordability crisis continues (see box).
In Montreal, there is a dichotomy between the island and its suburbs. On the island of Montreal, there is a vacancy rate of 3.7%.
“The gradual resumption of international migration and the return of face-to-face university courses have reduced the vacancy rate in the city center, but to a level higher than it was before the pandemic”, explains Francis Cortellino, economist CMHC, in the report.
Strong suburban appeal
Unlike the island, the suburbs are practically full, with a vacancy rate of 1.1% despite a growing supply of rental accommodation.
“Of the 12,000 new apartments that have been added to the rental stock of the CMA in 2021, approximately 60% are in the suburbs. However, the low vacancy rates are a sign that demand has once again been very strong,” observes the CMHC.
As we observed in the owner-occupied market, a shift in demand from the island of Montreal to the suburbs may also have occurred in the rental market, with tenants looking for apartments larger or newer ones at often a lower (or similar) price.
Excerpt from Rental Housing Report from Canada Mortgage and Housing Corporation
As for rent increases, they are lower in central Montreal neighborhoods, where the vacancy rate is higher than in the suburbs. For example, downtown, the increase in rents was 2%, while on the South Shore, it was 4.2%.
In Quebec as a whole, the estimated variation in the rent increase is 3.8%.
Asked to comment on the report, Martin Messier, president of the Association of Quebec Landlords, points out that the Montreal market remains one of the most affordable in the country. At an average monthly rent of $932, “Montréal continued to post one of the lowest rents in Canada,” says CMHC.
But do not look for accommodation at this price in the classifieds. The average posted price for a vacant 2-bedroom unit on the market is $1,134, CMHC found, or 22% more than that of a rented unit.
A shortage of 40,000 affordable housing units
CMHC estimates that there is a shortage of approximately 40,000 affordable rental units in the Montreal area. According to his calculations, approximately 120,000 households have the financial means to pay a monthly rent of $625 or less per month while respecting the threshold of 30% of monthly income devoted to housing. However, only 80,000 rental units are in this price range. In Montreal, the stock of housing considered affordable for the poorest 20% of renters represents 13% of the inventory of rental housing. In Toronto and Vancouver, only 0.5% of all housing meets the same affordability criteria, says CMHC economist Francis Cortellino.