RENTAL MARKET REPORT Montréal CMA

RENTAL MARKET REPORT Montréal CMA

HOUSING MARKET INFORMATION RENTAL MARKET REPORT Montréal CMA CANADA MORTGAGE AND HOUSING CORPORATION Date Released: 2020 The overall vacancy rate*... DECREASED to Below CMA % Similar to CMA 1.5 Above CMA (!North Shore (!Laval South Shore The average rent is*... (! (!Island of Montréal Below CMA (!Vaudreuil-Soulanges $841 Similar to ProvinceCMA Above ProvinceCMA UP by 3.6% PRIMARY RENTAL MARKET (by bedroom type) Bachelor One bedroom Two bedroom Three or more bedrooms “As a result of relatively strong demand, the % % % % vacancy rate in the Montréal area decreased 3.2 1.6 1.4 0.7 in 2019, reaching 1.5%. Vacancy Rate Vacancy Rate Vacancy Rate Vacancy Rate The change in the average $ Avg. $ Avg. $ Avg. $ Avg. rent, for its part, was 3.6%.” 655 Rent 754 Rent 855 Rent 1,070 Rent Francis Cortellino Economist *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 - Montréal CMA - Date Released - 2020 Highlights Figure 1 The vacancy rate decreased in 2019, reaching 1.5%, a 15-year low. Vacancy Rate (%) Montréal CMA The vacancy rates have now reached 1.6% on the Island of Montréal and 4.0 3.9 1.2% in the suburbs. 3.4 2.8 2.8 The estimated change in average rent in the Montréal CMA was 3.6%, a more pronounced increase than 1.9 1.5 in recent years. The average rent for vacant two- bedroom apartments (thus still for rent on the market) in the metropolitan area was about 2013 2014 2015 2016 2017 2018 2019 $1,080, or around 25% more than the average for occupied units. Source: CMHC Privately initiated rental apartment structures of three or more units. The rental condominium vacancy In particular, there was a strong rise rate reached 1.8%, remaining Lastly, the aging of the population, in net international migration, especially stable compared to 2018. which can bring about a change of in the non-permanent resident tenure (from owning to renting), also category, and a slight decrease in the probably supported rental demand. Vacancy rate at a 15-year interprovincial migration deficit. It is low in the Montréal CMA probable that most non-permanent Supply recorded another significant residents, such as foreign students increase, as around 8,500 new units According to the results of the Canada were added to the rental stock since and temporary workers, choose the 4 Mortgage and Housing Corporation rental market when they arrive,2 the last survey. This was around (CMHC) Rental Market Survey, the thereby greatly stimulating rental 1,000 more units than last year and vacancy rate in the Montréal area demand. The arrival of more asylum was well above the annual average decreased in 2019, reaching 1.5% seekers in the Montréal area over the from 2011 to 2014 (about 1,600 units). (compared to 1.9% in 2018). The rental last few quarters likely also helped The addition of a relatively large market has been firming up for three support demand. number of new units to the years now in the Montréal area and conventional rental stock over has not been this tight in 15 years. Demand for rental apartments in 2019 the last few years resulted from, also continued to be influenced by a among other things, the new The decrease in the proportion of probable decrease in the movement condominium market running out unoccupied units has been attributable to homeownership among Montréal of steam and the interest shown to rental housing demand that clearly households aged under 35.3 Indeed by certain developers in the supply increased at a faster pace than supply fact, while the proportion of renters of units geared toward the over the period from October 2018 within this group of households had aging population. to October 2019. shown a steady decrease between On the other hand, in certain sectors Demand was sustained mainly by 2001 and 2011, the data from the 2016 Census indicate that this proportion of Greater Montréal, the addition of the increase in migration to the this new supply to the market may metropolitan area. Indeed, net increased. This situation has apparently continued since then, given the have been counteracted somewhat by migration reached a new record the withdrawal of some apartments 1 pronounced rise in house prices on in 2019, as it did in the last two years. now used as short-term rentals. the Montréal market in recent years. 1 The most recent data on net migration are for the province of Quebec. Nevertheless, the Montréal CMA represents a significant share of this net migration. 2 According to data from the 2016 Census, 92% of non-permanent residents in the Montréal CMA were renters. 3 Sources: Statistics Canada, Census, 1996, 2011 and 2016, and National Household Survey, 2011; CMHC calculations. 4 Conventional rental apartment completions from July 2018 to June 2019. Only the structures that were open in June 2019 were included in the 2019 Survey. 2 Rental Market Report - Montréal CMA - Date Released - 2020 Low vacancy rates Scarcity of apartments: Montréal CMA rents in several sectors of tenants less inclined increase by 3.6% in 2019 Greater Montréal to move in 2019 Between the last two CMHC rental In October 2019, the vacancy rate According to data from our latest market surveys (those from 2018 in the suburbs was 1.2%. More survey, 15.7% of renter households and 2019), the estimated change in 10 specifically, the proportions of in the Montréal CMA had moved the average rent in the Montréal vacant units have now reached 1.5% into a new apartment within the past CMA was 3.6%. An increase of this in Laval, 0.8% on the North Shore, 12 months. This percentage was magnitude had also been observed 11 1.3% on the South Shore5 and 2.1% in slightly below last year’s figure at the beginning of the 2000s, a Vaudreuil-Soulanges. This last sector (17.4%), a sign that Montréal area period when the annual vacancy rate was in fact the only one where the renters were possibly more reluctant hovered between 0.6% and 1.5%. vacancy rate increased between to move this year given the scarcity In Greater Montréal, the changes 2018 and 2019. of available units on the market. in the average rents were generally between 3% and 4% in 2019, regardless On the Island, the vacancy rate In contrast, the tenant turnover rates8 of bedroom type. reached 1.6% in October 2019.6 remained lower in Toronto (9.5%) and More specifically, the rates were Vancouver (13.6%). These two urban The average rent for two-bedroom 3.3% for bachelor units,7 1.5% for centres also had rather low vacancy apartments in the Montréal area was one-bedroom and two-bedroom rates (1.5% and 1.1%, respectively). $855 in 2019. With an average rent of apartments and 0.8% for apartments $865, the Island of Montréal was the with three or more bedrooms. Given From a geographic standpoint, the large sector of the CMA where two- that the Island of Montréal accounts turnover rates in Greater Montréal bedroom apartments were the most hovered between 14% and 16% in expensive ($830 in the suburbs). for three quarters of the rental 9 housing stock in the CMA, these most of the large sectors. figures therefore generally reflect the vacancy rates for the overall Figure 2 Montréal metropolitan area. Vacancy Rates (%) by Bedroom Type However, the results for the Island Montréal CMA of Montréal mask realities that varied % by sector. The zones of Le Sud- 2018 2019 Ouest–Verdun and LaSalle posted 4 vacancy rates hovering around 0.5%, while Saint-Laurent had a rate of 3 around 3.0%. 2 1 0 Bachelor 1-Bedroom 2-Bedroom 3-Bedroom + Total Source: CMHC Privately initiated rental apartment structures of three or more units. 5 Including Saint-Jean-sur-Richelieu. 6 The vacancy rate was 2.0% in 2018, but the difference is not statistically significant. 7 Data should be used with caution, given the low statistical reliability. 8 A unit is counted as being turned over if a new tenant moved in during the past 12 months. A unit can be counted as being turned over more than once in a 12-month period. This includes tenants who moved into a different unit in the same building during this period. 9 Montréal, Laval–North Shore, South Shore and Vaudreuil-Soulanges. 10 When comparing year-over-year average rents, the age of the building must be take into consideration because rents in newly built structures tend to be higher than in existing buildings. By comparing rents for units that are common to both the 2018 and 2019 fall rental market surveys, we can get a better indication of actual rent increases paid by most tenants. 11 From 2001 to 2004, the estimated change hovered between 3.4% and 5.3%. In 2010, the estimated change in the average rent was also 3.4%. 3 Rental Market Report - Montréal CMA - Date Released - 2020 It is interesting to note that the Figure 3 average rent for vacant two-bedroom apartments (thus still for rent on the market) in the metropolitan area was Estimated Change (%) in Average Rent Montréal CMA 3.63.6 about $1,080, or about 25% more than the average for units already 2.5 2.5 occupied by a household.

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