Twice a year, CMHC conducts a Rental Market Survey that is meant to capture a snapshot of the vacancy rates as well as the average rental rates across different areas in Canada.Figure one displays the vacancy rates for rental units in the Toronto Census Metropolitan Area (CMA). This area is defined as the municipalities surrounding the urban core of Toronto. The report concludes that across the CMA, the average apartment vacancy rate is 1.6 per cent.While this overall percentage did not change from last year, and is typically tight, most areas within the CMA experienced an increase in the vacancy rates.
What do vacancy rates mean for renters?
You don’t need to be a math genius to figure out this formula. Generally speaking, the higher the vacancy rate, the lower the rental price and slower the growth in rental rate. This is a simple supply and demand equation – the greater the supply of rental units available, the cheaper the price, because the demand is low.This is good news for tighter-budget renters, as they may be able to afford a bigger place for a more attainable price.But on the other hand, the lower the vacancy rate, the higher the rental price. This means that there is a greater demand for rental units but not enough supply, making the rent more expensive.By looking at the image above, areas such as Brampton and Bradford West Gwillimbury have higher vacancy rates compared to Toronto, York Region and Pickering.The highest vacancy rate in the CMA is Bradford West Gwillimbury at 2.9 per cent, whereas the lowest vacancy rate is Orangeville at 0.7 per cent. Aside from Bradford West Gwillimbury, other notable areas that may be of interest to renters are Mississauga, Brampton and York City.Each of these municipalities have a vacancy rate above two per cent, meaning the rent will be more affordable than Toronto’s or North York’s rental market.
Factors affecting vacancy rates:
A number of factors influence whether vacancy rates rise or decline. For example, the report indicates that the rising costs of homeownership in 2013 kept the rental market steady, as current renters continued to rent, while others were hesitant to make the leap to homeownership.Another factor is the increase in employment opportunities. As more job opportunities become available, more newcomers make their way to the area. Immigrants and young professionals usually rent first while building up enough savings, credit and employment history to buy a home.And, more and more these days, where we live is determined by where we work. Do you need to travel into the city, or do you work more locally? Is driving a must, is public transit an option – or your only choice? Given all your options, how long of a commute do you want?So, weighing all these factors, and whether you’re looking for an area with some rural charm but with urban amenities or just a cheaper area to rent, consider looking at the hidden gems north of the GTA.