Canadians who have tracked the western migration of the country's economic engine may not be surprised to learn that booming economies in Alberta and British Columbia (BC) have not only fueled home buying, but have also created high demand for rental accommodation. According to a recently-released housing survey, rental vacancy rates are lowest in Alberta (0.9 percent) and BC (1.2 percent) -- provinces experiencing continued strong population growth. The national average rental apartment vacancy rate for Canada's 35 major centres was 2.8 percent.

Both provinces are attracting Canadians from across the country with promises of employment and good salaries. Economic expansion in the west, coupled with downward market pressures on the automobile industry in Ontario, and higher unemployment in eastern provinces is driving this westward job-hunting migration. This influx has resulted in high demand for homes, both owned and rental.

Low interest rates and high rents have made buying an attractive alternative to renting. Generally, an increase in home ownership is often coupled with an increase in the number of available apartments, but hot real estate markets in Alberta and BC have the lowest vacancy rates in the country.

Two Ontario brothers, who we'll refer to as Colin and Warren Watson, are among those fighting for western rental space. Colin left Toronto, bound for Calgary in July 2006, after finally nailing down a one-bedroom, basement apartment over the Internet. Even at rents that seemed considerably higher than Toronto rates, apartments were snapped up as soon as they were posted online.

"Rents were going up so quickly that I could only get a six-month lease," said Colin. "When I arrived in Calgary, the property manager wanted to renegotiate the lease at a higher rate and when I refused he attempted to put me in a lesser apartment -- but I held my ground."

His brother, Warren, packed up after graduating in Engineering and drove to Calgary to land at his brother's front door last fall. After weeks of chasing apartments, Warren found an affordable, if very run down, apartment in an older building. Now that he is established in his new job, Warren has improved his rental accommodation at three times the rent.

In April 2007, CMHC conducted its first-annual spring rental market survey to provide vacancy, availability and rent information on privately-initiated structures in all centres over 10,000 population across Canada. Results on key rental market indicators such as availability, vacancy rates and rents were published in June. CMHC also conducts its Rental Market Survey in October with results reported in December. These and other market reports are available as free downloads from the federal housing agency.

This Spring Rental Market Survey will be compared in year-over-year analysis to the second spring survey planned for 2008. CMHC analysts stress that results of the spring and fall surveys should not be directly compared to avoid incorrect conclusions about trends in rental market conditions: "A key reason for this is that changes in rents, vacancy rates, and availability rates between the spring and the fallmay not be solely attributable to changes in rental market conditions; they could also reflect seasonal factors. For example, if more people tend to move in the spring than in the fall, it could have an impact on vacancy and availability rates as well as the level of rents. Alternatively, in centres where there are a significant number of university students, vacancy and availability rates could be higher in the spring if students move home for the summer."

The results of CMHC's new Spring Rental Market Survey revealed that the lowest April 2007 vacancy rates were in Calgary at 0.5 percent, and in BC's Abbotsford (0.6 percent), Kelowna (0.7 percent), and Victoria (0.8 percent). All the major centres in British Columbia posted a vacancy rate below 1 percent as the province's increasing population and the continued relatively high home ownership costs continue to feed rental demand.

Urban renters have the most choice in Windsor ON (11.6 percent), Moncton NB (6.1 percent), Saint John NB (5.7 percent), Thunder Bay ON (5.5 percent), and Charlottetown PEI (5.3 percent). The lowest average monthly rents for two-bedroom apartments were in Quebec: Trois-Rivières at C$482 and Saguenay at C$491.

Across Canada, the highest average monthly rents for two-bedroom apartments were:

• Toronto C$1,073

• Vancouver C$1,051

• Calgary C$1,037

In other major centres, average rents were below C$1,000.

"Interestingly, the highest average rents were not in one of Canada's major centres, but in the northern Alberta community of Wood Buffalo, where the average monthly two-bedroom rent was C$1,681," stated Bob Dugan, Chief Economist at CMHC's Market Analysis Centre. "Strong economic growth due to activity in the oil sands in Wood Buffalo has attracted workers from other parts of the country and has driven up demand for rental housing."

Published: July 3, 2007

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