Rentsync National Rental Demand Report: December 2021

Executive Summary

In this comprehensive national rental demand report, we outline significant changes in unique leads per property across Canada. The data presented here is the largest data-backed analysis of rental market demand in Canada using aggregate ILS data (over 20 rental listing sites).

The data included in the Rentsync National Rental Demand Report can be used to compare and contrast demand and lead volume for the properties you manage within a given city and will allow you to make more sound decisions on marketing and advertising.

As you observe demand and unique lead volume percentage, it's possible to measure this against your own metrics, and see whether you are in line with current industry trends, and if not, how to pivot your strategies as a result.

Methodology

In order to present this data, Rentsync has determined three key calculations for each area of the report, they are as follows:

Demand Score: Our demand score is rated out of 10 (with 10 being the highest score a city can receive), and is calculated based on unique leads per property, per city, and compared against benchmark data. 

For example: Waterloo, ON received a demand score of 6.5 this month, versus 6.6 last month. Therefore, Waterloo experienced a decrease in its demand score by 0.1 this month.

Demand Percentage (% +/-): This is determined according to the year-over-year (YOY) or month-over-month (MOM) increase or decrease in unique leads per property.

For example: The month-over-month unique leads per property in Waterloo, ON went down 2% in November versus October. However, in November 2021, the year-over-year Demand Score in Waterloo, ON went up 4.5 points based on an increase of 223% unique leads per property compared to November 2020.

Position: The position is determined by unique leads per property, with cities that have at least *20 properties or more. The position will vary depending on demand.

For example: This month, Waterloo, ON moved down 1 spot on the Top 50 Canadian Cities in Demand. Year-over-year Waterloo, ON is up 9 spots since last year.

*The following report provides month-over-month ILS data for November 2021 versus October 2021, as well as a year-over-year comparison from November 2021 versus November 2020. It also outlines the month-over-month and year-over-year trends in primary, secondary, and tertiary markets.

Key Takeaways:

Month-over-month (M/M): Overall, unique leads per property from October to November decreased -7.83%. The month-over-month market snapshots are as follows:

• Primary: Unique leads per property decreased -2.61%
• Secondary: Unique leads per property decreased -8.5%
• Tertiary: Unique leads per property increased -5.5%

*The decrease in unique leads per property is consistent with seasonal shifts in renter behavior and the associated decrease in online traffic. This decrease while expected is in fact substantially lower than in November 2020 which experienced a decrease of -12.42% month over month. This suggests that we are likely to see a similar albeit smaller variance in October to November 2021 data versus October to November 2020.

Year-over-year (Y/Y): Overall, in Canada, unique leads per property? for multifamily residential housing is up +40.45% this year versus the same time last year, indicating that rental demand remains on an upwards trajectory. Overall, the year-over-year (November '21 vs November '20) data shows:

• Primary: Unique leads per property are up +53.1% 
• Secondary: Unique leads per property are up +84.3%
• Tertiary: Unique leads per property are up +113.5%

*The year over year analysis indicates that rental demand has increased across all markets, with the greatest growth experienced in tertiary markets.

Top 50 Canadian Cities in Demand

*Demand is determined by calculating unique lead volume per property by market.

Surrey, BC saw a 13% increase in unique leads per property this month versus last month.

Downward

• Oshawa, ON moved down 4 spots and saw a decline of 23% in unique leads per property.
• Burnaby, BC dropped 4 spots, and saw a decline of 14% in unique leads per property this month versus last month.
• Halifax, NS dropped 2 spots this month with an 11% decrease in unique leads per property.
• Victoria, BC moved down 7 spots, saw a 17% decrease in unique leads per property.
• East York, ON moved down 6 spots, and saw a 13% decrease in unique leads per property.
• Branford, ON dropped 6 spots, and saw a 17% decrease in unique leads per property this month.
• Guelph, ON moved down 9 spots, and experienced a 21% decrease in unique leads per property.
• Sudbury, ON moved down 3 spots, and experienced a 14% decrease in unique leads per property.
• Abbotsford, BC moved down 2 spots, saw a 14% decrease in unique leads per property.
• Welland, ON moved down 8 spots, and saw a 19% decrease in unique leads per property this month.
• Niagara Falls, ON moved down 6 spots, and reported a 18% decrease in unique leads per property.
• Lethbridge, AB moved down 5 spots, and reported a 12% decrease in unique leads per property.

Top 10 Canadian Cities in Demand Drill Down (M/M): November 2021 vs. October 2021

Gatineau, ON re-entered the list with a demand score of 7.2 due to an increase in listed properties that meet our reporting criteria.

*We should note overall that although the relative demand scores decreased substantially month-over-month this is moreso a result of a greater number of active properties listing their available units, and not as an outcome of lead demand experiencing a substantial dropoff as would be expected moving into the holiday season.

Top 10 Canadian Cities Drill Down (Y/Y): November 2021 vs. November 2020

Gatineau, ON re-entered the list, and due to a lack of comparable data, we are unable to comment on it's change.

*Since November 2020, new cities that have entered the top 10 list include Halifax, NS, ON, and Coquitlam, BC. Other notable cities include Waterloo, ON, New Westminster, BC, Burnaby, BC, and North Vancouver, BC. With the renormalization of renter traffic and apartment inquiries we would expect that the markets attracting the greatest volume of inquiries would shift once more to major markets, as was experienced prior to Covid, however, this has not been fully realized yet.

Although renters are becoming increasingly more comfortable with the new normal and have gone out to the market in sufficiently large volumes in order to start reabsorbing much of the vacant apartment stock left unoccupied by the Covid shift towards secondary markets. The actual focus of many seems to remain in secondary suburban communities. Many households have begun to rent in major cities whether in a bid to capitalize on the marginally improved affordability offered by depressed rents, or simply to move forward with their lives, however the demand experienced by smaller outlying communities has not slowed.

This suggests to us that the long term trend of individuals moving further from major markets is likely to continue and that we are likely to see suburban communities remain in high demand, in regards to lead traffic and inquiries.

An Analysis of Key Canadian Markets

In order to better segment our data and analyze what is happening within specific markets across Canada, we have broken down our data into 3 key markets: 

1. Primary (Populations Over 600K)
2. Secondary (Populations Between 600-235K)
3. Tertiary (Populations Between 235-100K).

Here we will gain a deeper perspective on demand across larger populations and any movement due to the impact of COVID-19 on the rental market.

Key takeaways

Month-Over-Month (M/M)

• Primary: Unique leads per property are down -2.61%
• Secondary: Unique leads per property are down -8.5%
• Tertiary: Unique leads per property are down -5.5%

Year-Over-Year (Y/Y)

• Primary: Unique leads per property are up +53.1% 
• Secondary: Unique leads per property are up +84.3%
• Tertiary: Unique leads per property are up +113.5%

Primary Markets (Populations >600K)

Primary Market Drill Down (M/M): November 2021 vs. October 2021

Vancouver, BC increased by 3% unique leads per property since last month.

North York, ON also increased by 8% unique leads per property this month versus last month.

Edmonton, AB remained at 0.9 in demand points but did see a 6% increase in unique leads per property.

Downward

• Mississauga, ON saw a -11% decrease in month-over-month unique leads per property.
• Calgary, AB saw a 8% decrease in unique leads per property from last month.
• Scarborough, ON also experienced no point reduction, as it saw a small -1% decrease in unique leads per property since last month.
• Ottawa, ON experienced a 5% decrease in unique leads per property from  the previous month.
• Toronto, ON saw a 8% decline in unique leads per property this month versus last.
• Winnipeg, MB reported a 5% decrease in unique leads per property this month versus last month.
• Montreal, QC experienced a 13% decline in unique leads per property since last month.

(See the year-over-year analysis below, for more perspective on demand in primary markets.)

Primary Market Drill Down (Y/Y): November 2021 vs. November 2020

3% vacancy in Q3 2021 down from 3.2% in Q3 2020. Alongside the growing demand for apartments, we also experience growth in rental rates which suggest that not only has demand rebounded, but that market fundamentals are returning, which have allowed for the continued growth and acceleration of rental rates within metropolitan areas after over a year of stagnation.

Upward

• Vancouver, BC moved up 3 spots, experiencing a 135% increase in unique leads per property year-over-year.
• North York, ON reported a 73% increase in unique leads per property year-over-year.
• Mississauga, ON reported a 59% increase in unique leads per property this year versus last.
• Calgary, AB moved up 1 spot from this time last year and saw a 107% increase in unique leads per property. 
• Scarborough, ON moved down 3 spots, but saw a 44% increase of unique leads per property.
• Ottawa, ON moved up 3 spots, and saw a 47% lift in unique leads per property this year versus last.
• Toronto, ON moved down 1 spot but saw a 69% increase in unique leads per property this October versus last October.
• Montreal, QC moved down 3 spots this year but experienced a lift of 24% in unique leads per property.

Downward

• Winnipeg, MB saw a 11% decline in unique leads per property this year versus last year. 
• Edmonton, AB moved up 1 spot but saw a 16% decline in unique leads per property from 2020.

Secondary Markets (Populations ~600-235K)

Secondary Markets Drill Down (M/M): November 2021 vs. October 2021

Gatineau, QC experienced a reduction in overall lead volume, and an increase in active buildings which has resulted in an overall reduction in its demand score, but enters the list at the top spot this month.

Downward

• Oshawa, ON moved down 3 spots and saw a decrease of 23% in unique leads per property.
• Halifax, NS moved down 1 spot, and experienced a 11% decrease in unique leads per property this month versus last month.
• Victoria, BC moved down 3 spots, and saw a 17% decrease in unique leads per property.
• Brampton, ON moved down 1 spot, and saw a 2% decrease in unique leads per property from last month.
• London, ON moved down 2 spots, reported a 7% decline in unique leads per property this month versus last month.

Secondary Market Drill Down (Y/Y): November 2021 vs. November 2020

Gatineau, QC entered the list this year, but due to lack of inventory this time last year, we cannot make an accurate year-over-year comparison.

Tertiary Markets (Populations ~235-100K)

Tertiary Markets Drill Down (M/M): November 2021 vs. October 2021

Richmond, BC moved up 1 spot, and saw unique leads per property increase by 17% this month versus last month

Cambridge, ON moved down 1 spot, but saw a 6% lift in unique leads per property this month versus last year.

St. Catharines, ON moved up 3 spots, and experienced a 3% increase in unique leads per property this month versus last month.

Downward

• Burnaby, BC saw a 14% decrease in unique leads per property this month versus last month.
• East York, ON dropped 3 spots, and experienced a 13% decrease in unique leads per property.
• Kingston, ON reported a 5% reduction in unique leads per property this month versus last.
• Guelph, ON moved down 3 spots, and saw a 21% decrease in unique leads per property.
• Sudbury, ON moved down 3 spots, and saw a 14% decrease in unique leads per property.

New to top 10 tertiary markets

• Coquitlam, BC entered the list in the #2 with a demand score of 4.7
• Barrie, ON entered the list at #10 with a demand score of 2.6

Tertiary Markets Drill Down (Y/Y): November 2021 vs. November 2020

Burnaby, BC remained at the top of the list and saw a 101% increase in unique leads per property.

Conclusion

The data shown in this report shows that this month the Canadian rental market has remained consistent from October to November, with minor seasonal declines in unique prospects per property. The seasonal decline remains consistent with month-over-month data from Nov. vs Oct 2020 However, it is possible that supply for purpose-built rentals is further impacting lead volume. Vacancy rates in urban areas such as Toronto have dropped from 6.4% in Q1 of 2021 to 3% in Q3, and with less availability for specific unit types, lead volume is slowing, as renters are not inquiring on units that do not meet their needs.

Vacancies have declined by .2% year over year which can be in part attributed to the reopening of borders and immigration. Therefore, with the continued and growing demand experienced by secondary and tertiary markets the development of larger purpose-built rental communities which is common in larger urban centers may become more common place in these smaller communities. This will further motivate new immigrants entering Canada that are priced out of major markets to begin settling in smaller communities thus further incentivizing developers to build more and larger apartment communities across the country. Many developers will also appreciate the fewer barriers to entry, and lower rates of competition amongst existing apartment product within these smaller markets which will further promote the development of new rental housing stock.

We will continue to monitor, and provide an in-depth data analysis, month-over-month, and year-over-year to provide you with the most accurate insights that can help to support your ongoing marketing and advertising strategies, especially as we navigate through these unprecedented times