Canada’s vacancy rate hit a record low of 1.5 per cent in 2023.
It is the lowest rate recorded since Canada Mortgage and Housing Corporation (CMHC) began tracking data in 1988.
With fewer places available for people to rent, the cost of those units also went up.
Average rent growth for two-bedroom units reached eight per cent last year, according to CMHC.
The increase was much higher for “turnover” units — those which saw new tenants move in.
Turnover units saw an average increase of 24.1 per cent compared to 5.1 per cent for non-turnover units.
“The vacancy rates and rent increases we are observing are further evidence the current level of rental supply in Canada is vastly insufficient and the need to increase this supply is urgent,” said Kevin Hughes, CMHC’s deputy chief economist.
Hughes said strong rental demand continued to outpace supply in communities across the country, making it very difficult for renters to find housing they can afford.
Higher mortgage rates and persistently high home prices also continued to make it harder and less attractive for renters to transition to homeownership, said CMHC.
The construction of new rental homes continued to be difficult for homebuilding due to higher costs for financing and construction materials, along with labour shortages.
CMHC said the rented condominium market also tightened in 2023. The average vacancy rate for rented condominiums fell to 0.9 per cent, down from 1.6 per cent in 2022.
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