Urban apartment occupancy rates climb

Report Northern cities seeing more vacancies, Edmundston posts one of highest rates in province

Apartment units in New Brunswick's largest urban centres are filling up quickly, according to a new report released Wednesday by Canada Mortgage and Housing Corporation.

                                           

 The rental market is tighter now than it was even two years ago, and it continues to stay fairly tight,' says Donald Hazen, manager of Hazen Investments Ltd.

                                           

 Vacancy rates for New Brunswick's three largest cities hovered around the provincial average of 4.7 per cent.

New Brunswick's urban centres recorded an average apartment vacancy rate of 4.7 per cent in spring, down from 5.3 per cent during the same time last year. Smaller urban areas however, especially in the north, showed vacancy rates above the provincial average.

Dale Noseworthy, director of investor relations for Killam Properties Inc., which operates rental properties throughout Atlantic Canada, said Killam's holdings in New Brunswick reflect the new data.

"We've had some strong improvements," said Noseworthy. "I noticed in the CMHC report that certainly the bigger centres have seen the improvements, and that's where we own. So we have seen some positive trending and continue to have strong occupancy levels."

Killam's vacancy rate for the end of March 2009 was three per cent according to Noseworthy, compared to 6.6 per cent last year. Noseworthy, however, attributes the higher number last year to new property acquisitions.

The report also showed that cities in the north, including Campbellton, Edmundston and Bathurst, saw their vacancies go up. Edmundston posted one of the highest vacancy rates in the province at 9.2 per cent.

Claude Gautreau, senior market analyst for Canada Mortgage and Housing Corporation, said some of the figures for smaller urban centres weren't necessarily reflective of long-term growth in vacancies.

Gautreau said that because there are fewer rental units in smaller cities, any vacancies can skew numbers much more than vacancies in larger cities.

"Obviously if you have a fluctuation either up or down, it's going to create a fluctuation in the vacancy rate that can appear like there is a large change, when in reality it hasn't changed that much," he said.

Vacancy rates for New Brunswick's three largest cities hovered around the provincial average of 4.7 per cent.

Both Moncton and Saint John posted vacancy rates of 4.1 per cent and 4 per cent. Fredericton saw a vacancy rate of 5.3 per cent, a decrease of 0.5 per cent from 2008.

Donald Hazen, manager of Hazen Investments Ltd., said the vacancy numbers reflected his company's experiences in Saint John.

"The rental market is tighter now than it was even two years ago, and it continues to stay fairly tight," he said.

As vacancies have gone down, rental prices have increased compared to last year. In Fredericton and Moncton, the average price for a two-bedroom apartment was $712 and $673 respectively in April; last year, average rates for those same rental units would have been $696 in Fredericton and $665 in Moncton.

Saint John's average rental rate for a two-bedroom apartment sat at $643 in April, much closer to the provincial average of $653. Rates in smaller urban centres varied between $463 and $524.

Rather than attribute the increase in rent to lower vacancies, Gautreau said the numbers reflect an increase in utility costs and normal inflation.

Hazen said in the interim his company is benefiting from the robust rental market.

"We're always better off when we're full," he said.

 

Source: Published Thursday June 11th, 2009 - Telegraph Journal