The Canada Mortgage and Housing Corporation’s annual rental market report shows the vacancy rate in Greater Victoria is at one per cent, and the cost for a two-bedroom unit rose by 3.1 per cent.
The average rent for a two-bedroom apartment rose to $1,571 in October 2021 from $1,507 in October 2020, which is higher than the national average rent of $1,167 for a two-bedroom.
The report says the rental market in Greater Victoria returned to the relatively tight conditions that were seen pre-pandemic, with vacancy rates declining to one per cent from 2.2 per cent in 2020.
The vacancy rate in the West Shore dropped to 0.4 per cent in 2021 from two per cent in 2020.
Saanich saw the sharpest rent hike in the region at a 5.6 per cent increase.
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According to the report, in October 2021 the City of Victoria had the highest number of rental units on the market, with 17,764 units, and the rest of the municipalities combined have 10,396 units.
The City of Victoria has a one per cent vacancy rate, and the rest of the municipalities combined have a 0.9 per cent vacancy rate.
In the region, there was a particularly high demand for two-bedroom units, units with rent below $1,400, new rental units built after 2018, or bachelor units renting at $1,400 or higher.
The demand for bachelor units was driven by the return of post-secondary students to the area due to the return to in-person learning.
The report also notes the expansion of new rental units slowed to about half of what was added in 2020. In 2021 only about 660 units were added to the market in the region.
Among units completed since 2018, 83 per cent were one-bedroom and two-bedroom and over half of them are in the West Shore area.
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A household income less than $42,000 per year cannot affordably rent a bachelor unit in the region, according to the report. The market level of rent is $350 higher than the affordable level.
CMHC defines affordable rent as 30 per cent of the household income.
Households with a lower than $64,000 annual income would have to spend $400 more than the affordable level to rent a two-bedroom unit in Greater Victoria.
In Victoria, households would need to work 162.6 hours at an average wage level in order to earn enough that rent would be at 30 per cent of the income.
Of the 37 markets that were surveyed in the rental market report, 21 saw the vacancy rate decline, including Vancouver, Calgary, Victoria, and Halifax.