Despite approval for hundreds of units, P.E.I. vacancy rate still under 1%, says new report
Units approved in the last 2 years should be coming onto the market starting next year
It's getting harder to find an apartment on Prince Edward Island, according to new data released by the Canadian Mortgage and Housing Corporation this week.
The vacancy rate for apartments on P.E.I. dipped from 1.1 per cent in 2023 to 0.8 per cent in 2024 — the lowest rate in the country.
This marks the third year in a row that the province's vacancy rate has hovered around 1 per cent.
P.E.I. has seen the largest population increase rate per capita in Canada since the start of the pandemic, and that certainly affects the vacancy rate, said Lukas Jasmin-Tucci, an economist with CMHC.
"We had a strong demand — stronger than what we saw in other provinces — and this, in part, explains why the vacancy rate is low," he said.
As the vacancy rate went down, the average cost of rent went up. The average monthly rent for a two-bedroom unit increased by about $50 compared to last year.
"Historically, in P.E.I., this would be one of the highest increases of rent," Jasmin-Tucci said. "This is because we're in a period of a very low vacancy rate, and this puts pressure on the market and it translates into those higher rents."
Finding a place to live
With higher rent prices and fewer vacancies, it remains hard to find housing on P.E.I., said Ryan MacRae, an organizer with P.E.I. Fight for Affordable Housing.
"Every organization that works in housing right now would say they're strapped," he said, adding that many are well over capacity with the amount of requests coming through.
"We've seen, over the last year, a lot of large apartment buildings… get converted into condominiums," he said. "That is a loss of rental housing. We are losing that right now."
While the conversion of apartments to condos is part of the problem, "it's a minor factor when we compare it to population growth," Jasmin-Tucci said.
"Population growth is really the main demand factor, and this is what's putting pressure on the market," he said.
While a variety of factors can influence rental availability, many agree the solution is to create more housing.
"The increase of supply is always the key, because the more you have homes added to the market, the more you have availability, the more you have options," Jasmin-Tucci said. "This is always the first solution for those kinds of situations."
Creating new housing
In Charlottetown, officials approved 155 applications for residential builds this year, which together would create 374 new units. Last year, the city approved 274 applications, for a total of 409 planned units.
Although the applications were approved, that doesn't mean the units have been built yet.
We need to strike a balance between meeting the expectations of our community while also ensuring that it is… financially feasible for the development community and private sector to invest.— Michael Ruus, Charlottetown's director of integrated growth
"There's a delay between the start and the completion, so we can expect to have those units be added to the market very soon, probably within the next year," Jasmin-Tucci said.
Across the province, "there are several hundred units still under construction and not included in the vacancy rate survey," the provincial Department of Housing, Land and Communities said in a written statement.
The City of Charlottetown said it's on track to meet its target of 1,500 new units by 2027, and it's trying to make it easier for developers to start new builds.
"We want to make sure that every regulation that we have in place is very purposeful," said Michael Ruus, Charlottetown's director of integrated growth. "We need to strike a balance between meeting the expectations of our community while also ensuring that it is… financially feasible for the development community and private sector to invest within the city of Charlottetown."
The provincial government is also focused on "reducing red-tape by increasing permitting efficiency, providing supports across the housing continuum and looking ahead to new programming in the future," the Department of Housing, Land and Communities said in a written statement.
"Government is committed to bringing balance to the market by working with developers to add units, with investments such as the housing challenge fund, HST rebate for purpose build multi-unit buildings and our affordable housing development program... making a difference," the statement said.
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With files from Stacey Janzer and Tony Davis