[mmmatt]

Added apartment vacancy rates

Take the latest SJ rate with a grain of salt...its very abnormal when looking back at long term trends...and based on the numbers I follow it doesn't add up. There has not been much multiple construction in SJ in the last year (in fact the total # of units in the CMA went down from 8,578 to 8,521). And with apparent flat population growth that leads me to believe the vacancy rate should be stable.

In any event...here is CMHCs explanation of the latest numbers:

In the spring of 2012, the vacancy rate in Fredericton stood at 3.8 per cent, up from three per cent a year earlier. Steady in-migration continued to bolster demand for rental units, resulting in the lowest vacancy rate in the province. The balance between supply and demand, however, has been impacted by higher than average levels of construction activity, particularly during the last three years. Due to rapid development in the local rental market, the number of apartment units under construction last year in Fredericton was at a historically high level, with a monthly average of approximately 200 units maintained throughout the year. As a result, the addition of new units to the local rental market proceeded at a pace slightly ahead of what existing demand has been able to absorb, thereby, contributing to the higher vacancy rate.

In Greater Moncton, a similar trend was observed, as the expansion of the local rental supply has also outpaced demand in recent years. Combined construction activity in 2010 and 2011 accounted for the second highest two-year total for apartment starts in the region since 1980. As a result, the average monthly number of apartment units under construction during the second half of 2011 was just under 600 units. In contrast, between 2005 and 2009, the monthly average for the number of apartment units under construction was just over 200 units. Consequently, the increase in the supply of new units available to local consumers has progressed at a faster pace than the local market has been able to absorb, pushing the spring 2012 vacancy rate to five per cent, up from last year’s rate of 4.1 per cent.

In Saint John, the vacancy rate was up significantly, rising to 8.4 per cent. Compared to either Fredericton or Moncton, the expansion of the local rental universe has proceeded at a relatively modest pace in Saint John in recent years. In 2011, rental starts in the Saint John CMA were limited to 80 units. Favorable housing market conditions and a lack of population growth in Saint John, combined with the continued migration of people away from the downtown area towards current and expanding residential areas (particularly to the Kennebecasis River Valley), has curbed demand for rental units, leading to the higher vacancy rate in the spring of 2012.