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The CMHC released its bi-annual rental market statistics report this morning and it brings good news for Yellowknife renters. The vacancy rate in townhomes and apartments has eased to 5.3%, a rate that we haven’t seen since the fall of 2009 – and then only briefly. This marks the sixth straight reporting period with increasing or steady vacancy (see table at the bottom of this post).
It is very interesting to note that, according to CMHC’s report, the total number of rental units in our city declined to 1,928. We haven’t had this few rental units in town since 2007. The units haven’t disappeared, but some have been converted to hotel rooms while others have been taken off the market for renovations. There is also a third possibility – landlords may be choosing to take empty units off the market for renovations rather than letting them continue to sit empty. More empty units would push the vacancy rate even higher and would give renters more bargaining power.
As mentioned in previous posts, Yellowknife’s trend of increasing rental vacancy is largely the result of a recent boom in condominium construction. Condo construction affects vacancy rates in two ways. It draws renters out of the rental market and into the home ownership market, and it creates competition for the rental market by increasing the number of privately owned condos that are rented out to tenants. Private rental units are not captured in the CMHC report.
With so many options on the market, it should follow that rental rates in Yellowknife will slow their growth. Landlords should also be motivated to renovate their buildings in order to attract tenants.
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Source: data taken from current and past CMHC Rental Market Statistics reports.
