HOUSING MARKET INFORMATION RENTAL MARKET REPORT Québec CMA CANADA MORTGAGE AND HOUSING CORPORATION Date Released: 2018 * Northern The overall vacancy rate ... Surrounding Area (! DECREASED to Below CMA % Similar to CMA Above CMA 3.3 Charlesbourg Beauport (! (! (! Haute-Saint-Charles Les Rivières Val-Bélair-L'Ancienne-Lorette Basse-Ville * (! (! The average rent is ... (! (!Haute-Ville Saint-Augustin-Cap-Rouge (! Sainte-Foy-Sillery Below CMA (! (!South Shore East $ Similar to CMA 813 (!South Shore Centre Above CMA UP by 1.2% (!South Shore West PRIMARY RENTAL MARKET (by bedroom type) Bachelor One bedroom Two bedroom Three or more bedrooms “Over the past year, rental market demand in % % % % Québec increased faster 3.4 3.3 3.2 3.2 than supply. The vacancy Vacancy Rate Vacancy Rate Vacancy Rate Vacancy Rate rate decreased from 4.5% in 2017 to 3.3% in 2018.” $ Avg. $ Avg. $ Avg. $ Avg. 567 Rent 720 Rent 839 Rent 998 Rent Nicolas Bernatchez Senior Analyst, Economics *CMHC collects data on the primary and secondary rental market annually, in the fall. These data refer to the primary rental market, which only includes rental units in privately- initiated apartment structures containing at least three rental units. The secondary rental market covers rental dwellings that were not originally purpose-built for the rental market, including rental condominiums. The primary vacancy rate and rent level is based on all surveyed structures, while the rent increase is based only on structures common to the survey sample in both the current and previous year. Rental Market Report - Québec CMA - Date Released - 2018 Highlights the previous period (2,700 units between 2016 and 2017), the number SUBSCRIBE NOW! The overall vacancy rate for of completed units remains significant Get email notifications when CMHC apartments decreased from compared to the average in publications are released or updated. 4.5% in 2017 to 3.3% in 2018. recent years. Sign up for a free myCMHC account for enhanced site access, including one-click The proportion of vacant rental Given the decline in the vacancy subscriptions to the reports and tables units decreased in several sectors rate observed this year, it is clear that matter to you. of the area. that demand more than compensated Get your myCMHC account today! for the increase in supply. There are The change in the average rent between 2017 and 2018 is estimated at 1.2%, a similar value Figure 1 to that observed in recent years. Apartment Vacancy Rate (%) The vacancy rate for rental condominiums also decreased, 4.9 reaching 2.5% (from 3.9% in 2017). 4.5 4.0 Rental market demand 3.1 3.3 increased proportionally 2.3 faster than supply 2.0 1.6 Based on the findings of CMHC’s 1.0 latest Rental Market Survey, the 0.6 0.6 proportion of vacant rental units in the Québec census metropolitan area (CMA) decreased from 4.5% in October 2017 to 3.3% in October 2018 (figure 1). Market Source: CMHC tightening, which began last year, has continued accordingly this year.1 Figure 2 The vacancy rate decreased despite a further marked increase in the Number of Conventional Rental Units Completed in the Year number of new units in the area. Preceding Each Rental Market Survey The Survey’s findings therefore show 2,718 that the demand for rental units has 2,483 remained relatively strong and even increased faster, proportionally, compared to supply; this has 1,489 1,482 1,560 supported the absorption of available units on the market. 1,015 719 801 Between July 2017 and June 2018, nearly 2,500 conventional rental units2 were completed in the Québec metropolitan area (figure 2). Although this increase in supply is slightly lower than that observed during Source: CMHC, Starts and Completions Survey Data from July to June, for example, from July 2017 to June 2018 for the 2017/2018 period. 1 The vacancy rate of rental units decreased from 4.9% to 4.5% from 2016 to 2017, the first decline since 2008. 2 Conventional rental units exclude seniors’ housing units. 2 Rental Market Report - Québec CMA - Date Released - 2018 undoubtedly a number of economic Moreover, rental demand may have The rental housing vacancy rate and demographic factors that have been influenced by a slowdown in the decreased in Haute-Ville, Basse-Ville, to be taken into account to explain movement to homeownership among Sainte-Foy–Sillery, Charlesbourg, this strengthening of rental young households. Between 2011 Haute-Saint-Charles, Val-Bélair– housing demand. and 2016, the proportion of renter L’Ancienne-Lorette, and Saint- households among those under age Augustin–Cap-Rouge. Market First, the Québec-area labour 35 increased slightly,7 a trend that conditions remained relatively market has rebounded in the past has likely continued. This would stable in Les Rivières and Beauport.9 two years. The creation of full-time 3 have further supported rental Overall, the vacancy rate in the jobs has remained steady, and the housing demand. Québec agglomeration decreased unemployment rate has remained from 4.6% in 2017 to 3.3% in 2018. low, which has certainly helped to The strengthening of demand attract and retain workers in the in Québec is not an isolated On the other side of the river, the area, as well as increase demand for phenomenon. The decrease in the proportion of vacant units actually rental housing. Moreover, population vacancy rate in the Québec area in increased in the western part of growth in the area is increasingly 2018 is in line with significant, overall the South Shore, from 1.3% in 2017 supported by immigration,4 which tightening of the rental market across to 2.7% in 2018. The increase in supports rental demand, since the the province. The overall vacancy rate supply in this area was therefore vast majority of newcomers opt of Quebec’s six metropolitan areas8 proportionally higher than that for rental accommodation when decreased from 3.3% last year to of demand over the past year. The they arrive.5 2.2% this year. overall vacancy rate for the entire South Shore remained relatively The age of the population is also an stable, at 3.3% (3.5% in 2017). important factor to consider. Indeed, Market tightening certain households choose to turn observed in several A lower vacancy rate for to the rental market after reaching sectors of the Québec retirement age, for various reasons a wide variety of units (to free themselves from property agglomeration maintenance, reduce living space, etc.). The detailed analysis of the Survey’s This year, the proportion of vacant findings shows that the decrease The amount of rental housing demand units decreased on the North-Shore, linked to acceleration in the aging of in the vacancy rate does not stem in several sectors of the Québec from a particular type of unit, but the population in Québec was, and agglomeration, which explains the remains, uncertain, but this portion rather from an overall tightening relatively marked decrease in the of the market. Demand therefore of demand has likely begun to be felt metropolitan area’s overall in a much more noticeable manner. increased for different types of units vacancy rate. and structures, a result of the varied This phenomenon is likely amplified needs and preferences on the market. by the gradual retirement of the baby boomer cohort, even though their return to the rental market has been more or less limited up to now.6 3 Between June 2016 and June 2017, the number of full-time jobs increased by 4.2% in the Québec CMA; between June 2017 and June 2018, it increased by 4.5% (12-month moving average). 4 Based on Statistics Canada’s population estimates, net international migration as a proportion of the total population increase in the Québec CMA was 65% in 2017. This proportion was 46% five years earlier, in 2012. 5 Based on Statistics Canada’s 2016 Census data, 89% of households arriving from abroad in the Québec CMA between May 2015 and May 2016 were renters. 6 Statistics Canada census data shows that, between 2006 and 2016, the renter rate in the baby boomer cohort remained stable, at 31.5%. This stability is attributable to a decrease in renter rates among the youngest boomers (aged 50–59 in 2016) and an equivalent increase among the oldest boomers (aged 60–69 in 2016). The net result is that there have only been, on average, about 120 additional renter households stemming from the baby boomer cohort each year. 7 Based on data from the 2011 National Household Survey and Statistics Canada’s 2016 Census, the proportion of renter households among those under age 35 increased from 60.1% in 2011 to 62.9% in 2016. 8 The Montréal, Québec, Gatineau, Sherbrooke, Saguenay and Trois-Rivières census metropolitan areas (CMAs). 9 The variations are not statistically significant. 3 Rental Market Report - Québec CMA - Date Released - 2018 Between 2017 and 2018, the rental Figure 3 housing vacancy rate in the Québec CMA decreased for bachelor (from 6.1% to 3.4%), one-bedroom Apartment Vacancy Rate (%) by Rent Range (from 4.4% to 3.3%) and two-bedroom (from 4.5% to 3.2%) apartments. 7.7 The vacancy rate for larger units, 2017 2018 those with three or more bedrooms, 5.6 10 4.8 is estimated at 3.2%. Overall, 4.2 4.3 4.0 3.7 units of all sizes now have similar 3.4 3.3 2.9 3.2 vacancy rates. 2.5 Moreover, data based on property age and size shows that the proportion of vacant units decreased in many $799 $899 $999 different types of buildings.