The Canadian Mortgage and Housing Corporation's Fall 2011 Rental Market Report show that vacancy rates for rental housing in Canada's major centres have fallen an average of 0.4%, from 2.6% in October of 2010 to 2.2% in the same month one year later.
In Ontario, the vacancy rate fell from 2.9% to 2.2% over the same period of time, and the most major drops were in the largest cities. The vacancy rate change in Toronto has been especially drastic, falling from 2.1 to 1.4% over the same time period.
When vacancy rates fall, it means that supply has shrunk relative to demand, and this is a major factor in driving up rents. In Toronto over this period, average rent for a two bedroom apartment has increased from $1,123 to $1,149, the highest in the country.
The reasons for the nationwide decreases in rent are varied, but one main reason is that fewer apartments have been completed, while the increase in demand for housing has remained steadily high. High demand for housing is influenced by a number of factors, notably that employment is rising for people under 25, a group that primarily rents, and immigration to urban centres remains high relative to historical trends.