The Fall 2011 Canadian Mortgage and Housing Corporation Rental Report.

The CMHC 2011 Rental Report was release today December 13, 2011. The trend of lower vacancy rate is continuing while prices are remaining near the rate of inflation.

Highlights of the report for Vancouver

-Vacancy rates edge down form 1.9 in October 2010 to 1.4% in October 2011 for purpose-built rental apartments.

-The average rate of rent increase between October 2010 and October 2011 was 2.3%, near the rate of inflation of 2%.

-Most of the increase in the stock of rental units was from secondary market rental condominiums.

-Vacancy rates edged down from 2.2 % to 0.9 % in October 2011 for rental condominium apartments.

-Population growth, employment opportunities, and the relative affordability of rental accommodation compared to ownership housing are expected to support demand for rental housing.

Rental Affordability Indicator Lower

The CMHC has developed and tool to measure affordability for renters. The tool is called the “Rental Affordability Indicator”. The tool is predicated on the notion that households should only spend 30% of their income on housing to be in a prudent financial state. To spend more than 30% of a households income on housing is a known risk factor for homelessness.

The indicator uses a three-year moving average of the median income of renter household and compare it the median rent for a two-bedroom apartment. The CMHC market rental report states that:

“An indicator value of 100 indicates that 30 per cent of the median income of renter households is necessary to rent a two-bedroom apartment going at the median rent. As the rental affordability indicator increases, the market becomes more affordable: as the indicator declines, the market becomes less affordable.”

In Vancouver from 2010 to 2011 the affordability indicator fell to 83 from 86.

Now that Vancouver has this tool to measure “affordability” residents will be able to track and benchmark progress on this is issue. Given that the median household income in Vancouver is $47, 000 and over 50% of residents are renters the Rental Affordability Indicator will be a important tool in measuring the progress that the City is making as a whole on developing affordable housing options.

Full report is available here:CMHC Rental Market Report

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