CMHC Rental Report Breakdown

CMHC released their annual rental report. Let's dive in to the major takeaways.

February 16th, 2024

Read Time: 3 minutes

CMHC just released their annual rental report.

Each October, they survey tens of thousands of apartment owners to create a national composite of information.

To their credit - this is one of the only national platforms that accurately tracks turnover, rental growth, and vacancy rates.

Today we'll highlight what we found most interesting.

Let's dive in.

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Ontario Multifamily Team

Active Deal Sheet

**FOR SALE:

1)** 1260 Webster St, London (46 units)

2) Mid-Toronto Off-Market (50 units)

3) 1423 Dufferin St (7,700 sf)

**UNDER CONTRACT

4)** 17 Gulliver Rd, Toronto (42 units)

5) 8 Laxton Ave, Toronto

6) 126 Alice St, Bracebridge (25 units)

BUYER MANDATE:

7) $200M+ GTA Value Add

8) 50 - 100 units Toronto - 1 Beds

9) 100 unit+ Value-Add GTA West

**RECENTLY CLOSED:

10)** 2 Laxton Ave, Toronto (54 units)

11) 1689 VP Ave, Toronto (54 units)

12) Waterloo Portfolio (404 beds)

See something that interests you? Contact [zoe.prachter@colliers.com](http://zoe.prachter@colliers.com) to learn more.

National Report Highlights

My main takeaway from the report: Any (brief) demand relief brought on by Covid has ended. Vacancy and turnover rates hit new lows while rent rapidly increased across the country.

Vacancy Rates: Reached a new low of 1.5% nationwide, down from 1.9% last year (and down from 2.2% in 2019 pre-pandemic).

Rental Growth: Soared to 8.0%, fueled by a supply-demand mismatch, with factors like immigration and low homeownership affordability exacerbating the situation.

Market Dynamics: Immigration primarily filtered into Toronto, Montreal, and Vancouver. However, Calgary and Edmonton saw a massive surge in demand due to interprovincial migration.

Source: CMHC Rental Report 2023

The Toronto Story

While not all of you care (exclusively) about Toronto, it is a great proxy for the broader Ontario market. Here are my main takeaways.

Turnover Dropped: This continues to be a challenge for value-add operators. Turnover in Toronto is down to 8.3% from 9.8% last year.

Rental Growth: Stiff competition for fewer vacant units led to rapid rent growth. The growth in the average rent for 2-bedroom apartments accelerated to 8.7%, the largest increase recorded since 2000.

Investor-Owned Condos: Nearly 40% of all condos are now owned by investors - thus contributing to the rental stock. Housing is housing. All types of housing should be encouraged.

Rental Arrears: The share of rental units in arrears increased to 19.6% in 2023, from 12.8% in 2022. This stat was startling to our team, especially because we haven't seen these numbers reflected in evictions (at all). Our main takeaway is that this highlights the growing affordability crisis in the city.

Source: CMHC

TL;DR

Our Canadian rental fundamentals are stronger than ever. Surging demand has pushed rents up and driven vacancy down. Unfortunately, this has created a challenge for tenant mobility in rent-controlled markets.

Thanks for reading.

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