Market knowledge on rental rates, vacancy rates and turnover rates is a crucial part of forecasting ROI on a rental property. Today, CMHC released the latest provincial and national statistics based on Centris data. Although rental market data can vary widely from neighbourhood to neighbourhood, these figures provide a cursory overview of the average rates you can expect on a rental investment in Montreal.
TL;DR: Vacancy rates have dropped across the city, indicating low supply and high demand. Montreal offers some of the most affordable rental apartment prices in Canada. Rental condominiums are significantly more expensive – the average condo rents for $1,180.
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Apartment Rental Prices per Bedroom Number
The average price for a 2 bedroom apartments in Montreal’s CMA was $809, compared to $782,000 in 2017. The estimated change between average rents in 2017 and 2018 was 2.5%. The changes varied between 2% and 3% or so, depending on the apartment types and the large sectors of the CMA.
- Bachelor apartments: $641 (increase from $597 in October 2017)
- 1 bedroom apartments: $720 (increase from $698 in October 2017)
- 2 bedroom apartments: $809 (increase from $782 in October 2017)
- 3 bedroom apartments: $1,007 (increase from $965 in October 2017
Average Rental Prices, 2 Bedroom Apartments, per Geographical Area:
- Zone 1: Downtown Montréal, Île-des-Soeurs: $1,459
- Zone 2: Le Sud-Ouest (Mtl), Verdun: $759
- Zone 3: Lasalle: $754
- Zone 4: NDG, Côte-Saint-Luc, Hampstead, Westmount, Montréal-Ouest: $1,041
- Zone 5: Côte-des-Neiges, Mont-Royal, Outremont: $989
- Zone 6: Plateau: $1,059
- Zone 7: Villeray, Saint-Michel, Parc-Extension: $729
- Zone 8: Hochelaga-Maisonneuve: $753
- Zone 9: Rosemont, La Petite-Patrie: $752
- Zone 15: Baie-d’Urfé, Beaconsfield, Kirkland, Pointe-Claire, Senneville, Sainte-Anne-de-Bellevue: $1,097
Average prices are significantly higher in the rental condominium market
Some renters who have delayed their homeownership plans are opting to rent condominium units instead of conventional rental apartments. Condominium buildings offer various services not typically provided in apartments, such as pools, gyms and concierge services. They also tend to be located closer to the employment hubs.
The average rent for two-bedroom condominiums in the CMA, at $1,200.
The Downtown– Île-des-Sœurs sector showed the highest the proportion of rental condominiums. In that sector, one quarter of all condominiums were rental units, compared to 18% in the overall CMA.
- Bachelor condos: $1,143 (increase from $958 in October 2017)
- 1 bedroom condos: $1,02 (increase from $989 in October 2017)
- 2 bedroom condos: $1,208 (increase from $1,180 in October 2017)
- 3 bedroom condos: $1,569 (increase from $1,542 in October 2017)
Montreal’s vacancy rate decreased to 1.9% in 2018
According to the 2018 Canada Mortgage and Housing Corporation (CMHC) Rental Market Survey, Montréal CMA’s vacancy rate decreased heavily from 2.8% in 2017 to 1.9 in 2018.
The decrease in vacant units attributable to increased migration to the metropolitan area, caused by higher net international migration (particularly in the non-permanent resident category), foreign students, and temporary workers. Aging populations who switch from homeownership to rentals also supports demand, along with young families who have been temporarily priced out of homeownership due to rising interest rates and prices.
Supply recorded a significant increase – 7,500 units were added to the rental stock since 2017. Nevertheless, increased demand continues to outstrip supply.
The Downtown–Île-des-Sœurs sector stood out with one of the lowest vacancy rates, at 1%.
Tenant turnover rate remained stable in 2018
Montreal’s turnover rate stayed stable this year at 17%, according to most recent survey. This rate remained higher than the rates recorded in Toronto (11%) and Vancouver (14%). Scarcity of rental apartment in those cities (low vacancy rates of around 1%) likely limits the ability of tenants to move between rental properties. Turnover rates fluctuated between 15% and 18% in all major sectors of the Montréal area.
How does Montreal compare to the rest of Canada?
When it comes to purpose-built rentals across Canada, Vancouver had the highest rent for a two-bedroom unit, at an average $1,649 a month. Toronto and Victoria, B.C. fell closely behind at $1,467 and $1,406 respectively.
All three cities with the most affordable purpose built rental were in Quebec – Montreal, Quebec City ($839) and Gatineau ($749) .
When it comes to the rental condominium market, the three most expensive cities in Canada were ($2,393 for a 2-bedroom), Vancouver ($2,034) and Victoria ($1,665).
National vacancy rates dropped to 2.4%, from 3% in 2017.
This article, CMHC Rental Market Recap – Montreal, 2018, appeared first on Shupilov News.