Housing situation improves in major centers, but becomes more difficult in outlying regions

Montreal, February 18 - In its 2022 Rental Market Report, the Canada Mortgage and Housing Corporation (CMHC) shows the consequences of population movements due to the health crisis. The shift in demand from large urban centers to the suburbs and regions has created an imbalance in certain outlying regions in Quebec where the housing stock is limited. However, the vacancy rates in Montreal and Quebec City are encouraging and keep us away from a housing crisis.

According to Benoit Ste-Marie, Executive Director of CORPIQ, "despite the strong increase in the cost of living in 2021 and historical increases in maintenance and renovation costs, rents have on average increased reasonably, even below inflation.  Rents remain the lowest in Canada according to the CMHC"

 

The situation in Montreal is improving

The vacancy rate on the Island of Montreal has risen from 1.6% in 2019 to 3.2% in 2020 and to 3.7% in 2021, which confirms the easing of the market that CORPIQ had anticipated. This is reflected in the price of rents. In fact, on the Island of Montreal, rents rose by 3.7% from October 2020 to October 2021. This is lower than the CPI for the same period, which was 4.1%, and lower than the 4.6% increase in rents for the previous period.

It should be noted that the vacancy rate for studios and "3 ½" units has increased, from 5.1% to 6.9% and from 3.3% to 4.5% respectively. This greater availability of units has resulted in relatively low rent increases, around 3.3% for these types of units. This data can be explained by the increase in the amount of space required per person, notably because of the new reality of remote working and the need, now imperative, to have an office space in one's dwelling.

 

Construction in Montreal's suburbs is booming

According to the CMHC, of the 12,000 new apartments added to the CMA's rental stock in 2021, approximately 60% are in the suburbs. Despite this, the vacancy rate remains stable and low at 1.1% outside the island of Montreal. On the other hand, as far as construction is concerned, the APCHQ estimates that the suburbs' share of rental housing starts will increase in 2022.

 

Low rent increase in Quebec City

The same phenomenon is observed in Quebec City as in Montreal, with an increase in the vacancy rate for the smallest units (3 ½ and less) and a decrease in the vacancy rates for units larger than 3 ½. In Quebec City, the vacancy rate has remained stable overall at 2.8%. 

However, rent increases in Quebec City are very low, with an average increase of 2.3% for all rents and only 1.7% for 6 ½ units and 1.9% for 5 ½ units.

 

Tension in the rental sector still present outside of major center

The vacancy rate decreased significantly in all CMAs other than Montréal and Québec City between October 2020 and October 2021: from 2.8% to 1.7% in the Saguenay CMA; from 1.3% to 0.9% in the Sherbrooke and Trois-Rivières CMAs; from 1.6% to 1.1% in the Ottawa-Gatineau CMA. It is likely that this trend will be the same in the smaller urban centers. One of the reasons for the problem is the low number of rental properties in the regions outside major centers in Quebec.

This population movement has had an impact on the average rent in two CMAs where the rent was very low. The regions of Saguenay and Sherbrooke experienced an increase of 7.1% and 4.7% respectively, despite this, rents remained well below the Québec average (Saguenay: $700; Sherbrooke: $727; compared to the provincial average for  urban centers: $892).

 

About CORPIQ

A non-profit organization bringing together 30,000 landlords and managers who own nearly 500,000 rental units and condos, CORPIQ is the largest association to offer services to landlords and to defend their interests, for over 40 years. It serves all regions from four offices with a total of 70 employees. Quebec landlords provide housing to 1.3 million renter households, seven out of ten of which own a duplex or triplex. Rental housing represents gross annual revenues of $10.5 billion, of which $1.6 billion is returned in municipal and school taxes. 

Information and interview requests:

Benoit Ste-Marie

Executive Director - Corporation des propriétaires immobiliers du Québec

Phone: 514-249-1691

Email: olbell@corpiq.com