Vacancy rates increase in P.E.I.

Ryan Ross
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It keeps getting easier to find an apartment in P.E.I. as the vacancy rate in the cities climbed to 7.1 per cent in October, according to the latest report from Canada Mortgage and Housing Corporation.

Jason Beaton, a market analyst with CMHC, said the main reason for the increase was because there was a lot of construction of rental properties.

“What happened the last four years is they really got ahead of supply,” he said.

The report showed the vacancy rate in Charlottetown rose from 5.7 per cent in October 2012 to 7.9 per cent in 2013.

In Summerside, the vacancy rate increased from one per cent in October 2012 to 2.7 per cent this year.

CMHC’s report also attributed some of the increase to falling international immigration.

The units with the highest vacancy rates were three bedroom apartments in Charlottetown, of which 9.6 per cent were empty in October while in Summerside 7.8 per cent of two bedroom apartments were vacant.

Beaton said Charlottetown’s developers have gotten ahead of the need for apartment rentals, although construction did slow down this year.

“We’re expecting that trend to continue through into 2014 and then hopefully see vacancy rates come down in 2014-2015.”

While vacancy rates have increased, it hasn’t led to a drop in rent.

In Charlottetown the average monthly rent increased from $758 last year to $763 in October 2013.

For Summerside, the October 2012 average rent was $687, which went up to $706 this year.

Beaton said it was unlikely there will be a drop in the average rent because newer units tend to rent for higher amounts.

“What we expect to see is basically rent will stay flat for the next two years.”

rross@theguardian.pe.ca

twitter.com/ryanrross

Organizations: Canada Mortgage and Housing Corporation

Geographic location: Charlottetown, P.E.I., Summerside

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Recent comments

  • Elwin
    December 15, 2013 - 10:29

    Its pretty clear rents are high to keep the nuisance people away

  • Sandra Boswell
    December 14, 2013 - 19:35

    These figures don't add up to why there are a glut of apartment vacancies. The real reason is the increased rents for apartments and houses. If you want to a house with today's asking prices, it would cost $1,800.00 to $2,500.00 plus, per month just to have a roof over your head. The cost of renting is very unfair. It is ALL about greed. Landlord's think we're all just coming from Alberta. If you're wondering why so many families are moving to Alberta, check the unfair rent increases for our small, under paid population. This is the answer, not the theories in the article. Yes, they over built, but over charging is the biggest reason. The average rent for a one bedroom that is livable is over $800.00 per month and a two bedroom is over $1,000.00. So the figures in this article must be from apartments that are not up to code, or full of mold, or both. Many apartment owners do not pay attention to code here. Do we even have a building code for PEI. Seems unlikely when you look at what some landlords are renting? Just saying.

    • Big Bud Brunsey
      December 14, 2013 - 23:29

      Sandra, I sure don't know where you are looking to rent, but I am renting a fantastic apartment on Brighton Road right across from the old P.E.I Hospital for $500 per month. Might I be so bold as to suggest you have pulled your figures out of thin air just to add a bit of punch to you comment? And no, there is no mould in my apartment and I consider it a high rent area. From my fire escape I can see heritage houses to more modern ones and not a drug dealer in sight.

  • will macdonald
    December 14, 2013 - 13:57

    why wouldnt it be they only want imagrants and americans with money PEI is for sale yet landlords keep getting permits to keep building

    • don
      December 15, 2013 - 08:52

      will macdonald. immigrants and american's has the money because this government gives it to them. i was told last year if i wanted money from this government it was simple give up my citizenship and change my name and i'll have no trouble getting money. now that o me is wrong but that's government. just sit back and watch how fast new islanders opens business. i'm not saying i do not want them on PEI but they should have to go thru the same hell as we do years of trying o get a small loan.

  • AD
    December 14, 2013 - 12:18

    Vacancy rates above 5% can create significant issues for the businessmen that own/operate these properties as they are forced to offer deals to attract tenants. These incentives, although potentially good for the tenant initially, creates financial losses for the landlords. Property taxes, development costs, maintenance costs, supplies, etc., are all rising substantially and we are creating a perfect storm of potential issues with continued development. Vacant units still have cost.. While most have little empathy for the business owners, not all are big-time operators with substantial cash flow. Small operators succumb to large business and results in run-down properties that small landlords cannot maintain. This does nothing for property values of other home owners when this happens. The trickle-down effect is substantial once we fall off that slope. I would like to see the City of Charlottetown take a serious look at this continued carte blanche to develop and slow down development in our current economic environment.

  • WOW
    December 14, 2013 - 09:14

    And how long did it take you to realize that all these now apartments being built would take the tenants away from the apartments already here? Common sense always shows that when the supply is more then the demand you will have a surplus.

    • don
      December 14, 2013 - 12:17

      well unless they lower the rent they will stay EMPTY. i can understand the increase due to fuel, damages. but if the renters would keep the apartments clean and no damages due to drugs,drunk parties the rent could stay down. but you will find a few scum lords that the government will not touch for some reason. i can remember years ago as a landlord if you moved the wrong way the government would check your places and they had to meet up to standards but not today. the laws are not in place to protect the renter just the owners that's the governments fault. but you also have o blame the people renting NO landlords should have to have to deal with the scum renter called druggies and drunks.