The Canadian Mortgage and Housing Corporation recently released its fall 2013 rental market statistics and Yellowknife’s vacancy rate in apartments and townhomes came in unchanged since the spring at 3.6%. It did rise substantially over the year, however, from 3.2% in October of 2012. It is interesting to note that the rental universe (total number of available rental units) shrank over the year by 41 units from 2,121 to 2,080. I’m not certain how the universe shrank. It could be that these units were converted to hotel rooms and condos, or they were taken off the market for renovations, or they were condemned. I am aware of a few federal government units that were declared unfit for habitation but I haven’t heard of any other such developments.
The possibility of apartment units being converted to condos brings me to an important point about these rental market statistics. Condos and townhomes that are rented out privately are not at all taken into account. Over the last three years, Yellowknife has seen substantial growth in the apartment-style condo market segment. As many readers will know, some of these new condos have been purchased as rental properties. CMHC can’t measure growth in this sector, but if it could I think the numbers would show a rising vacancy rate across all rental unit types.
In my opinion, the most important thing to take away from these numbers is the fact that the vacancy rate did not decline. In years past, it was rare to see high rates last for a full year. They would typically hover at or below 2%, with the occasional spike due to a new apartment building coming onto the market. But these extra units would be absorbed quickly and the low vacancy rate would return. In this environment, landlords were not compelled to reduce rents. But with these higher vacancy rates lasting longer, we should now start to see rents coming down here and there. At the very least, they should plateau. This will be a welcome development for renters.