Last month, Yardi launched the Canada Multifamily National Report, a quarterly series of reports analyzing portfolio performance, property management optimization and investment opportunities for multifamily professionals. The inaugural Canada National Multifamily Report covers vacancy rates, rent growth, and key fundamentals at the national, provincial and Census Metropolitan Area (CMA) levels. Key findings highlight last year’s strong demand and rent performance — indicating a promising 2022 for the Canadian apartment industry.
Smaller Markets Saw Strongest Rent & Lease Growth In 2021
As of December 2021, the national in-place rent averaged $1,326 — 2.2% higher than December 2020. Unsurprisingly, the highest average in-place rents were registered in the major metros of Vancouver and Toronto. Specifically, renting in Vancouver was $1,617, on average, while apartments in Toronto reached $1,520 a month. However, the highest increases in in-place rent happened in the smaller CMAs of London, ON (8.5%), and Halifax, NS (7.2%).
Notably, last year’s lease-over-lease rent growth was extremely strong, as were occupancy rates following 2020 vacancies. Nationally, new lease growth reached 6.2% year-over-year — the strongest in years. Meanwhile, the highest increases were in smaller markets like Hamilton, ON (11.8%), and London, ON (11.1%) — once again reflecting “the strength of smaller metros as a result of the out-migration from dense cities during COVID-19,” according to the report.
2022 to Be Strong Year for Canada’s Multifamily Market
Apartment demand remains high in the backdrop of increased immigration, rising single family housing prices, and gross national product and employment levels, which are surpassing pre-pandemic levels. In particular, the report highlights graduates and young people looking to form independent households among the driving forces behind apartment demand in the country.
Plus, the population also experienced a 1% boost in 2021 due to immigration, many of whom came through the Express Entry program, which focuses on welcoming highly skilled immigrants into the country. The demand from households coming from other countries should continue in 2022 as Canada aims to bring in almost half a million skilled permanent residents this year.
Likewise, more than 900,000 jobs were added in 2021, thereby reducing the unemployment rate to 5.9%. In fact, the Organization for Economic Co-Operation and Development (OECD) reported a 4.8% GDP increase last year and forecasts growth of 2.9% in 2022. But, even with a low unemployment level, homeownership is still unattainable for many and housing prices have become out of reach — leading to solid apartment demand and low vacancy rates.
For more data on the state of the Canadian multifamily market, get the full Canada National Multifamily Report here.
