Rents Rise In Hamilton

The Spec has some numbers on recent apartment rent rises in Hamilton:

"Between 2013 and 2014, Hamilton's vacancy rate fell to 2.3 per cent from 3.9 per cent, notes a city report based on Canada Mortgage and Housing Corporation data. 

The scarce supply is helping drive up rents: the average market rental unit went for $678 in 2006, jumped to $720 in 2010, and was $813 last year."

The vacancy rate dropping from 3.9% to 2.3% is quite a large drop and indicates a tight market. Hamilton's rents while increasing are a bargain compared to Burlington and Oakville, which don't have a big supply anyways. So like with housing prices, high GTA rents are spreading into Hamilton. 

Higher Hamilton housing prices are also likely driving higher rents as buying a house in Hamilton is much more expensive than five years ago (even though incomes have little changed).

Likely this will spark an exodus of people from Hamilton to places with still cheaper rents like the Niagara region and Brantford that aren't as influenced by the insane GTA housing market.

The vacancy rate moving from 3.9% to 2.3% also makes me wonder if this means Hamilton's population is growing faster now. With higher rents and housing prices, more properties that have been derelict and vacant will come on-line, especially in the lower city.

The Spec article also reports on rents in different areas. Interestingly, central Hamilton at $821 is slightly higher than the Mountain at $807 which is a sign the downtown is becoming more desirable to live in. 

Hamilton Apartment Vacancy Rates Plunge

The Spec has a story about apartment vacancy rates plunging in Hamilton. The pertinent numbers:

"Overall, the October vacancy rate for the Hamilton-Burlington-Grimsby area's 42,431 apartments was 2.2 per cent, down sharply from 3.4 per cent a year earlier."

"The CMHC research shows the average rent for a two-bedroom suite in the Hamilton area rose to $959 a month in October from $932 for the same month last year. That's an increase of almost 2.9 per cent when the provincial rent control guideline is 0.8 per cent. 

Vacancy rates across the province were 2.3 per cent, down from 2.6 per cent for the same month a year ago." 

What's interesting is that the area's vacancy rate went from well above the province's vacancy rate to slightly below. That would seem to confirm my hypothesis that relative to the rest of the Ontario economy (which has been performing poorly with sub 2% GDP growth for several years) Hamilton has been doing quite well economically.

One issue with these numbers is that Burlington is included and is likely a way stronger market, for both average rents and for vacancy rates. I doubt Grimsby is material. However with the number of apartments being more numerous in Hamilton and the vacancy drop being so strong, Hamilton's market has to be strengthening.

The other factor is the rapidly rising housing prices in Hamilton. As the main alternative to renting an apartment is buying a house, strong house prices which Hamilton definitely has had, is going to drive down vacancy rates.