Hamilton's apartment vacancy rate is up because younger adults can't leave home
When it comes to Hamilton's rental vacancy rate, there's good news and bad news
The vacancy rate for apartments has increased slightly in Hamilton, mostly because fewer young residents are finding full-time jobs that let them move out of their parents' places.
This is according to the Canada Mortgage and Housing Corporation's (CMHC) new rental market report for Hamilton, Burlington and Grimsby.
Hamilton's apartment vacant rate is 3.8 per cent, up from 3.4 per cent last year. The increased vacancy is a combination of steady supply and weak demand for apartments, said Abdul Kargbo, senior market analyst, in a report released Monday.
The reason? Fewer people aged 15 to 24 have full-time jobs compared to last year, the report said. So more are still living with their parents.
"With unfavourable employment conditions, some young adults were discouraged from leaving their parents' home for an extended period," said Kargbo's report.
According to Statistics Canada, 10.5 per cent fewer people aged 15 to 24 have full-time jobs this year compared to last year. In fact, the full-time employment rate is down 2.7 per cent overall in Hamilton.
More vacancies hasn't stopped rents from increasing. The average rent is up 5.1 per cent to $967.
Here's how that breaks down:
- Bachelor apartment: 7.4 per cent vacancy. Average rent: $673.
- One bedroom: 3.5 per cent. $869.
- Two bedroom: 3.4 per cent. $1,037.
- Three bedroom: 7.3 per cent. $1,232.
With more Syrian refugees arriving, international migration increased sharply in 2016, the report says. In the first four months of 2016, 1,840 immigrants came to Hamilton compared to 3,020 in all of 2015.
Most moved into rental units. But that wasn't enough to offset the impact of weak employment among young adults.
Here are some other highlights:
- Central Hamilton had the highest vacancy rate this year at 9.9 per cent. That's a steep increase from last year's 5 per cent. Home sales in that area, however, increased by four per cent. (The CMHC defines central Hamilton as the area of the lower city from Highway 403 to Sherman Avenue, minus the downtown core).
- Vacancies also increased in Grimsby and Stoney Creek (4.9 per cent this year compared to 3.8 in 2915), the downtown core (4.3 per cent, up from 4.1), the Mountain (4.3 per cent, up from 3.6), the west end (4.2, up from 4.1) and Ancaster/Dundas/Flamborough/Glanbrook (2, up from 1.6).
- Vacancies decreased in the east end (3.5 per cent, down from 4.2), central east (3.1, down from 3.6) and Burlington (1.1, down from 1.5).
- There are 42,686 apartments in Hamilton. In 2015, there were 42,591. About a quarter of those (10,236) are in the downtown core.
- Two bedrooms are the most common type of apartment (19,930). Bachelors are the least common (1,772). Bachelors also saw the highest rent hike this year, increasing 7.1 per cent over last year.
- People gravitate toward newer buildings. Private apartment buildings built before 1960 have a 5.6 per cent vacancy rate, while those built between 1990 and 2004 have no vacancies.