“Rental market conditions were unchanged owing to strong but stable rental demand and slight growth in supply.” - Amran Wali, Market Analyst, CMHC
In 2017, vacancy rates in Windsor remained low, and the average rent rates increased. Using the example of 2 bedroom apartments, the vacancy rate remained unchanged from the low 2016 rate of 2.4%, while the rent rate increased 3.2% in 2017.
Demand for rental units remained strong and steady, and supply grew slightly, by an additional 89 units. Of these 89 units, only 13 were newly completed apartments, so most of the increase in rental units was due to renovations and conversions being completed.
Windsor's population growth has been stable largely because of elevated net migration and a rising population of seniors. This population growth has also supported the strong rental demand, along with the surge in international immigration in the last 2 years, mostly by Syrian refugees.
Interest rates rose in 2017, and this along with new mortgage qualification guidelines result in fewer households transitioning from renting to homeownership. This could explain why the vacancy rate for rental units priced $1000 + was so low at 1.7%. These higher priced units tend to be occupied by households that will soon transition to homeownership. As that becomes more difficult to do, we can expect to see a growing demand for these higher-end units, especially as rates are expected to continue to rise in 2018.
Overall, this rental market is great news for investors. This means that renting out units is faster, we have a greater selection of tenants, and rent rates are higher. There is also a greater demand for more high-end units among those who are just on the cusp of being able to purchase a home.
Check out the full CMHC report here: