Canada’s average rent saw record growth in 2023 as demand outpaced supply, while the rental vacancy rate reached a record low of 1.5 per cent, a new report shows.
Released Wednesday, the annual report from the Canada Mortgage and Housing Corp. (CMHC) said the national vacancy rate for purpose-built rental units last year was the lowest since 1988, when the organization began recording the metric. The federal housing agency uses purpose-built rentals as its representative sample.
By comparison, the vacancy rate for those units was 1.9 per cent in 2022, which at the time was the lowest rate seen in more than two decades.
The national vacancy rate reflects the percentage of unoccupied and available residential units across the country. A lower rate typically means greater competition among renters and a higher incentive for unit owners to raise their rates.
For two-bedroom condominiums up for rent, the average vacancy rate fell from 1.6 per cent in 2022 to 0.9 per cent in 2023.
“While the recent revival of rental construction has been encouraging, it was evidently not enough to ease the market and curb steep rent increases,” the report reads.
Rent outpacing inflation
Rent prices soared in most markets, consistent with the observed decline in vacancy rates.
Growth in the average rent for two-bedroom purpose built apartments accelerated “sharply” to a record eight per cent in 2023, in a jump that outpaced both inflation (4.7 per cent) and wage growth (five per cent).
That left renters paying, on average, $1,359 per month for those units last year.
That growth figure was up from the 5.6 per cent rent growth recorded in 2022 and well above the 2.8 per cent growth documented from 1990-2022.
Meanwhile, the average rent for two-bedroom condos was $2,049 in 2023, up $1,929 from the previous year. This represented a six per cent increase.
Not all markets impacted equally
Lower-income renters faced significant competition in their hunts for affordable rates. In some cities, finding affordable units was next to impossible.
For a rate to be considered affordable, it should cost less than 30 per cent of a renter household’s before-tax income,CMHC said.
In Vancouver, Ottawa and Toronto, the proportion of rental units considered affordable for the bottom 20 per cent of earners was “statistically zero,” the federal housing agency said.
In Edmonton, those units made up 12.7 per cent of total spaces. In Calgary, 3.1 per cent of apartments were considered affordable for low-income renters.
In Montreal, 18.1 per cent of apartments were available at affordable rates for low-income earners. However, many of them were either bachelor or one-bedroom apartments, which could be unfit for families.
As for vacancy rates, Calgary and Edmonton saw steep declines. Their vacancy rates fell from 2.7 in 2022 to 1.4 per cent in 2023, and 4.3 to 2.4 per cent over the same period, respectively.
Vancouver remained the tightest rental market in the country, with a vacancy rate of 0.9 per cent, unchanged from 2022. Ottawa’s vacancy rate also remained the same as the 2022 level, sitting at 2.1 per cent.
In Toronto, Canada’s largest city, the vacancy rate dropped from 1.6 to 1.4 per cent. Meanwhile, in Montreal, the rate fell from two per cent to 1.5 per cent.
Vancouver remains the most expensive rental market, with $2,181 being the average monthly rent for a two-bedroom purpose-built apartment, followed by Toronto, where the average rent for those units was $1,961 in 2023.
The least expensive apartments are concentrated in Quebec, exemplified by Montreal’s relatively low 2023 average two-bedroom rent of $1,096.
Immigration, other factors impacting demand
Immigration led to increased demand for rental units in most large centres, while high interprovincial migration contributed in communities in Alberta, the report notes.
With net immigration to Canada trending sharply higher since 2020, there was increased pressure on the rental markets of Toronto, Montreal and Vancouver, cities that are also the destination for many international students.
In Edmonton and Calgary, the influx of interprovincial migrants — people who move from one province to another — led to increased demand.
The report suggests people are likely drawn to Alberta — at least partly — by the relatively strong employment growth in Calgary and Edmonton as well as lower home prices relative to Toronto and Vancouver.
Employment growth among young Canadians and the low affordability of homeownership also led to increased demand in the rental market overall.
VANCOUVER – Contract negotiations resume today in Vancouver in a labour dispute that has paralyzed container cargo shipping at British Columbia’s ports since Monday.
The BC Maritime Employers Association and International Longshore and Warehouse Union Local 514 are scheduled to meet for the next three days in mediated talks to try to break a deadlock in negotiations.
The union, which represents more than 700 longshore supervisors at ports, including Vancouver, Prince Rupert and Nanaimo, has been without a contract since March last year.
The latest talks come after employers locked out workers in response to what it said was “strike activity” by union members.
The start of the lockout was then followed by several days of no engagement between the two parties, prompting federal Labour Minister Steven MacKinnon to speak with leaders on both sides, asking them to restart talks.
MacKinnon had said that the talks were “progressing at an insufficient pace, indicating a concerning absence of urgency from the parties involved” — a sentiment echoed by several business groups across Canada.
In a joint letter, more than 100 organizations, including the Canadian Chamber of Commerce, Business Council of Canada and associations representing industries from automotive and fertilizer to retail and mining, urged the government to do whatever it takes to end the work stoppage.
“While we acknowledge efforts to continue with mediation, parties have not been able to come to a negotiated agreement,” the letter says. “So, the federal government must take decisive action, using every tool at its disposal to resolve this dispute and limit the damage caused by this disruption.
“We simply cannot afford to once again put Canadian businesses at risk, which in turn puts Canadian livelihoods at risk.”
In the meantime, the union says it has filed a complaint to the Canada Industrial Relations Board against the employers, alleging the association threatened to pull existing conditions out of the last contract in direct contact with its members.
“The BCMEA is trying to undermine the union by attempting to turn members against its democratically elected leadership and bargaining committee — despite the fact that the BCMEA knows full well we received a 96 per cent mandate to take job action if needed,” union president Frank Morena said in a statement.
The employers have responded by calling the complaint “another meritless claim,” adding the final offer to the union that includes a 19.2 per cent wage increase over a four-year term remains on the table.
“The final offer has been on the table for over a week and represents a fair and balanced proposal for employees, and if accepted would end this dispute,” the employers’ statement says. “The offer does not require any concessions from the union.”
The union says the offer does not address the key issue of staffing requirement at the terminals as the port introduces more automation to cargo loading and unloading, which could potentially require fewer workers to operate than older systems.
The Port of Vancouver is the largest in Canada and has seen a number of labour disruptions, including two instances involving the rail and grain storage sectors earlier this year.
A 13-day strike by another group of workers at the port last year resulted in the disruption of a significant amount of shipping and trade.
This report by The Canadian Press was first published Nov. 9, 2024.
The Royal Canadian Legion says a new partnership with e-commerce giant Amazon is helping boost its veterans’ fund, and will hopefully expand its donor base in the digital world.
Since the Oct. 25 launch of its Amazon.ca storefront, the legion says it has received nearly 10,000 orders for poppies.
Online shoppers can order lapel poppies on Amazon in exchange for donations or buy items such as “We Remember” lawn signs, Remembrance Day pins and other accessories, with all proceeds going to the legion’s Poppy Trust Fund for Canadian veterans and their families.
Nujma Bond, the legion’s national spokesperson, said the organization sees this move as keeping up with modern purchasing habits.
“As the world around us evolves we have been looking at different ways to distribute poppies and to make it easier for people to access them,” she said in an interview.
“This is definitely a way to reach a wider number of Canadians of all ages. And certainly younger Canadians are much more active on the web, on social media in general, so we’re also engaging in that way.”
Al Plume, a member of a legion branch in Trenton, Ont., said the online store can also help with outreach to veterans who are far from home.
“For veterans that are overseas and are away, (or) can’t get to a store they can order them online, it’s Amazon.” Plume said.
Plume spent 35 years in the military with the Royal Engineers, and retired eight years ago. He said making sure veterans are looked after is his passion.
“I’ve seen the struggles that our veterans have had with Veterans Affairs … and that’s why I got involved, with making sure that the people get to them and help the veterans with their paperwork.”
But the message about the Amazon storefront didn’t appear to reach all of the legion’s locations, with volunteers at Branch 179 on Vancouver’s Commercial Drive saying they hadn’t heard about the online push.
Holly Paddon, the branch’s poppy campaign co-ordinator and bartender, said the Amazon partnership never came up in meetings with other legion volunteers and officials.
“I work at the legion, I work with the Vancouver poppy office and I go to the meetings for the Vancouver poppy campaign — which includes all the legions in Vancouver — and not once has this been mentioned,” she said.
Paddon said the initiative is a great idea, but she would like to have known more about it.
The legion also sells a larger collection of items at poppystore.ca.
This report by The Canadian Press was first published Nov. 9, 2024.
