Just recently Vancouver’s rental vacancy rate was measured at being the lowest in the world at 0.6%.
CMHC has not released its figures, so Toronto’s rate is not currently known (last year’s published rate was 1.6%), but it is expected to be low, although not as low as that of Vancouver.
Single Family Detached Homes
Single Family Detached Homes are a sub-market that would have an even lower rate that the aggregated overall market that is researched by CMHC. For instance, the vacancy rate for a 1 or 2 bedroom apartment in both Vancouver and Toronto is far higher than that of single family detached homes. Consider an additional sub-market of homes with modern, quality and appealing finishes and you will see the inventory reduced even more drastically.
The impact on relocation
The impact on relocation cannot be over-stressed. Assignees or transferees hoping to rent in Vancouver or Toronto are going to be extremely limited in what is available. Assignees must reduce the usual shopping list of likes and dislikes and instead focus on only what is crucial in a property. When it comes to Single Family Detached Homes, relocation companies need to prepare assignees and transferees for bidding wars as properties are going for rental rates that are over the advertised rate. In addition, assignees need to be prepared to make an offer right away, because listings are being rented very quickly: sometimes within the same day.
How to prepare
Ensure that your assignees have their documentation in order and active Canadian bank accounts with available funds to make lease deposits prior to starting their home search. If you hear your transferee speaking about preferred residential areas, caution them to have an open mind and consider multiple neighbourhoods. If they have heard about certain neighbourhoods, chances are they are already very popular, and therefore have lower vacancy rates and higher demand. On the other hand, if the company has rental rate data produced by companies such as Mercer, you need to be aware that due to the rapidly changing market, those figures can be easily out of date. Even up to date data can quickly be outdated by a bidding war. Your company may have to consider an emergency slush fund for additional temporary accommodation costs because even the most well intended assignees may lose out on properties due to bidding wars. However, do not rubber stamp temporary accommodation extensions if you feel your assignee is being picky within this low vacancy context. Unfortunately, this is just not the marketplace where one can do that.