You would think that with all the new condos that have been delivered to the marketplace each year over the past decade, we would actually see rental vacancy rates increase as tenants become homeowners and investors become landlords, but it’s simply not so.
Last week, Canada Mortgage and Housing Corporation released its Greater Toronto Area Rental Market Report revealing that the GTA vacancy rate declined to 2.1 per cent in October 2010, down from 3.1 per cent in October 2009. CMHC expects the vacancy rate to slip to 2.0 per cent next year as the current trends impacting the rental market remain in place. Those trends include a slower outflow of renters into homeownership and a rising inflow of new renters from higher immigration.
Meanwhile, the average vacancy rate for condominium apartments on the rental market is even lower, sitting at just 1.6 per cent. According to CMHC, “data from the Toronto Real Estate Board’s latest MLS Rental Market Report indicates that the market for condo rentals is tightening.”
There’s a third source of rental housing in the form of units in single-detached, semi-detached, townhouses, duplexes and accessory suites. CMHC estimates that 150,000 households are living in these secondary units — three times the number living in condominium apartment rentals and representing 30 per cent of the entire rental market universe in the Toronto region.
I always like to look at things from an alternative perspective and my take on the low vacancy rate in the GTA is thank goodness for the major contribution that condo investors and homeowners are making to the rental housing supply in the GTA, because without them, the vacancy rate would be even lower than it is.