CMHC Rental Market Report – Quebec
Vacancy Rate Decreases at the Provincial Level. According to the results of the Rental Market Survey conducted by Canada Mortgage and Housing Corporation (CMHC) in October, 3.4% of Quebec’s rental stock (estimated at 838,502 units) was vacant in October 2017. This amounts to a one-percentage-point decrease from last year’s rate.
Despite rising rental construction in many areas of the province, the strength of the labour market and of immigration stimulated demand to a level that more than compensated the increase in supply.
Regional Perspective:
Tightening in several of the province’s markets. Of the province’s 44 urban centres (10,000 inhabitants and over), about half recorded a decrease in their vacancy rates. The other half did not exhibit a statistically significant change.
As for the Census Metropolitan Areas (CMA) (100,000 inhabitants and over), nearly all recorded a drop in the rate. The Saguenay area alone in not showing a statistically significant change. When comparing the rates of all six CMAs, the Saguenay area stands out with a vacancy rate greater than 6%. Last year, four CMAs had rates in this neighborhood.
In Census Agglomerations (10,000 to 99,999 inhabitants), the survey showed that the rate had also decreased (see table 1.1.1). Whereas in previous years, larger apartment units showed a relatively stronger rental performance, this year the rates were comparable. Bachelor units continued to stand out with a higher vacancy rate.
The Average Rental Rate Remains Relatively Stable According to the survey results, the average rent for a two-bedroom apartment maintained itself at $751.
Among CMAs, the rate was at its highest in the Québec CMA ($820) and its lowest in Trois-Rivières
($594). The estimated change in the average rent was 1.9% at the provincial level. It varied between 1.0% and 2.3% across CMAs. Given the tightening in several markets, a stronger growth in average rent could have been expected. The relative stability of rents could be explained by, among other factors, a certain hesitation of owners to raise rents given the recent increase in supply.
No Change in the Turnover Rate For a second year, CMHC has estimated the turnover rate of rental units, which is the share of units that changed tenants during the last 12 months. At the provincial level, the rate (estimated at 18.6%) did not change from last year. As for CMAs, the rate went from 17.3% in Montréal, to 25.7% in Sherbrooke. Only the Sherbrooke and Trois-Rivières CMAs recorded statistically significant increases. Analysis of the results by apartment size shows that the turnover rate is higher in the case ofbachelor units (25.3%).
Studies focused on rental turnover rates show that it they are influenced by many factors, including market conditions, building features, and renter profiles. While at this early stage, we are not able to explain with precision the differences observed in our survey, we will soon have sufficient data to begin examining this question.
This recent CMHC report shows why the rental market is doing so well and why it will continue to do so. If you are trying to purchase a property and are in competition with other investors you need to remove the conditions of your offer as quickly as possible. TempBridge Inc is one of the fastest private mortgage lenders in Montreal. They are professional and very knowledgeable about the investment market. Check them out at www.tempbridge.ca