Tuesday, January 08, 2008

Rental Market Report Greater Toronto Area from CMHC

Rental Market Report Greater Toronto Area

Report Highlights
  • The average apartment vacancy rate in the GTA was unchanged at 3.2 per cent in October 2007. Average same-sample two-bedroom apartment rents increased by 1.2 per cent.
  • Market conditions remained similar to 2006 because new renter household formation was offset by a movement of existing renter households into homeownership.
  • The rental market will experience little change in 2008, with the average apartment vacancy rate at 3.5 per cent and average rents growing by less than the rate of inflation. Rental Market Report - Greater Toronto Area - Date Released: 2007
  • Canada Mortgage and Housing Corporation 2 ment vacancy rate and same-sample rents grew below the rate of inflation. It is important to note that there was variation in rental market conditions across the different sub- markets of the GTA. Market Conditions in Line With 2006
  • Rental market conditions in 2007 remained in line with those experienced in 2006. There was no change in the 3.2 per cent average apart-
  • Several factors contributed to stability in vacancy rates in 2007. Increased home ownership demand, especially from the first-time buyer segment of the market, resulted in a substantial number of households vacating their rental accommodation

  • Rental Market Report - Greater Toronto Area - Date Released: 2007 Canada Mortgage and Housing Corporation 3 to the CMHC Renovation and Home Purchase Survey undertaken in the first half of 2007, 60 per cent of households who had already purchased a home or were planning to do so this year were buying for the first time. On net, the pool of first- time buyers has grown in comparison to 2006.

    Positive local labour market conditions in the GTA, including steady growth in jobs and earnings, coupled with low borrowing costs and a greater diversity of borrowing products contributed to the increase in first-time buyer activity. In addition, a greater supply of affordable housing types both low-rise and high-rise has provided more options for first time home buyers. Overall, housing remained affordable for many home buyers, including those making the move from rental to home ownership. On average, the required income to carry a mortgage remained below the average 2007 household income in the GTA. to move into a home of their own. Growing youth employment and sustained immigration into the GTA continued to attract individuals and families to the rental market, serving to moderate the impact of the increased movement to home ownership. In addition, fewer condominium apartment completions kept some first time buyers in their rental units for longer than expected.

    Factors both diminishing and contributing to rental demand are discussed below. Strong Ownership Demand

    Strong sales of existing homes and new homes in the GTA in 2007 were a drag on rental demand over the past year. Existing home sales will reach a record of 95,000 in 2007 and new home sales will remain strong at over 40,000. First-time buyers were the key factor underlying the strength in the home ownership market. According Condo Completions Cooled in 2007

    While the increase in demand for ownership housing was the key factor keeping vacancy rates in the GTA elevated this year, a dip in condominium apartment completions did temper the movement of first-time buyers into home ownership.

    In addition, fewer investor-held condominium apartments than expected came on line to compete with purpose-built rental apartments for tenants.

    While strong condominium apartment starts in 2005 and 2006 resulted in a record level of units under construction, very few apartments reached the completion stage this year. Through September, condominium apartment completions reached only half the level achieved through the first three quarters of 2006.

    Youth Employment Increased

    An important factor tempering the impact of home ownership on rental demand in 2007 was an increase in youth employment (individuals aged 15 – 24). This demographic tends to rent initially upon gaining employment and leaving their parental home.

    Overall GTA labour market conditions remained tight in 2007, with the unemployment rate remaining between 6.5 and 7.0 per cent. Young people continued to benefit from tight labour market conditions, especially through the creation of full-time jobs. Full-time jobs for More Renter Households Moving to Ownership in 2007

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    1. nice report, thanks for providing the info

    2. you are very welcome!

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