Rental market | More unoccupied housing

There are more unoccupied homes than last year in Montreal at the end of the year. While thousands of completed constructions have increased supply on the market, affordability still remains a major issue, concludes the annual report on the rental market from the Canada Mortgage and Housing Corporation (CMHC) .

As of October 2024, the housing vacancy rate stood at 2.1% in the Montreal census metropolitan area (CMA), an increase of 0.6 percentage points compared to the year. previous.

According to the CMHC report, published Tuesday, this trend reveals that for the first time since the pandemic, the housing supply better meets demand.

“In recent years, demand was so strong that even though there was plenty of supply on the market, vacancy rates fell or remained stable,” emphasizes Francis Cortellino, CMHC economist.

The Montreal region remains an exception. Elsewhere in Quebec, the market remains very tight. Unoccupied housing represents only 0.9% of the rental stock in the Quebec CMA and 1.9% in the Gatineau CMA.

A vacancy rate of 3% to 3.5% generally reflects a healthy market, specifies François Des Rosiers, full professor at the Faculty of Administration Sciences at Laval University. Below this threshold, the market favors owners to the detriment of tenants.

This year, 14,037 new housing units ready for occupancy were added to the Greater Montreal real estate market, or 3,436 fewer than in 2023. Despite this drop, the number of completed rental apartments is among the highest ever recorded, a noted CMHC, and far exceeded that of all other CMAs evaluated in the report.

In total, in the last three years, approximately 40,000 new rental housing units have been completed in Montreal, reports Mr. Cortellino. Without these constructions, the pressure would, in his opinion, be even greater on the market, since they are currently 95% occupied – which represents around 38,000 homes.

“If we didn’t have them [construites]where would these 38,000 households live now in Greater Montreal? They would be on the market, looking for accommodation,” replies Mr. Cortellino.

The increase in available housing in the metropolis is also due to a slight slowdown in demand: it takes more time than before to rent new housing, noted the analyst. The CMHC also attributes this slowdown to a slight decrease in immigration, permanent or not, in the metropolitan region.

Between 1^is July and 1^is October, the Canadian population experienced its slowest pace of growth since the first quarter of 2022, according to Statistics Canada.

“If we put together the drop in immigration and the very strong increase in rental production over the last two years, we obtain a less congested market for Montreal, even if it still remains quite tight,” assesses Mr. Des Rosiers .

Affordability further eroded

The vacancy rate, however, varies depending on the type of housing, noted CMHC in its report. Less than 1% of housing offered for less than $1,150, on the island of Montreal and in the suburbs, is available… And they represent approximately 60% of the metropolis’ rental stock.

Conversely, 5% of units with rents of at least $1,675 are unoccupied, which likely includes a high proportion of recently constructed rental apartments, CMHC said.

Downtown Montreal takes the prize for the greatest proportion of uninhabited housing.

Mr. Des Rosiers emphasizes that the increase in costs of construction materials and labor, in particular, accentuates the rise in prices in the new rental market.

“We must be aware that we must find solutions for lower rent ranges, which remain much tighter,” believes Mr. Cortellino.

Tenants who changed apartments were also much more subject to a significant rent increase (18.7%) than those who renewed their lease (4.7%), found the CMHC.

Concerns that persist

These rent increases, throughout Quebec, are very worrying, according to the Regroupement des committees logement et associations de tenants du Québec (RCLALQ) and the Popular Action Front in Urban Redevelopment (FRAPRU).

“We cannot say that the shortage is over. We are far from that, even if there is a small improvement,” reacts Véronique Laflamme, spokesperson for FRAPRU.

The organization is concerned that the construction of new housing is seen as a solution to the crisis, since it is not just a question of scarcity. It’s also a question of price, according to M^me Laflamme, and this issue is reflected in the low vacancy rate of the least expensive housing.

“By analyzing the trends of the last three years, we see that all CMAs have experienced increases exceeding 20%,” argues the RCLALQ, in a press release.