Article from The Record, December 15, 2008 - www.therecord.com

A couple of years ago, some landlords would offer a month's free rent, free parking or gift cards to entice new tenants.

Now, apartments in Waterloo Region are snapped up faster than in many other Canadian cities, thanks in part to a young population delaying home ownership, a new report says.

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The number of vacant apartments in the Kitchener census metropolitan area fell to 1.8 per cent in October, compared with 2.7 in the same month last year, says the Canada Mortgage and Housing Corp. report. The vacancy rate is the lowest since 2001, when it was 0.9 per cent.

It's also well below the provincial average of 2.7 per cent.

The Kitchener census metropolitan area includes all of Waterloo Region except Wellesley and Wilmot townships.

"It might take a little longer to find an apartment," said Erica McLerie, senior market analyst for the Canada Mortgage and Housing.

"Especially to find that perfect place," McLerie said.

With a younger population in the Kitchener area compared to other cities -- including students and professionals in the high-tech sector -- and an uncertain economy, people are in no hurry to buy homes, McLerie said.

The average rent for a two-bedroom apartment in the area is $845, up from $829 last year.

For many, that's a more affordable option than home ownership. Home prices shot up by six per cent in the past year, McLerie said.

The corporation predicts the region's vacancy rate will continue to drop to 1.6 per cent next year.

It's great news for property managers such as TransGlobe, who own more than 50 apartment buildings in the area and thousands across the country.

"It's just a vibrant market we're delighted to be in," said Paul Dillon, director of marketing and public relations. "It's absolutely among our most thriving."

But the tighter rental market will add to the challenge for community housing, said Rob Horne, planning commissioner for Waterloo Region.

"Finding quality, affordable housing has always been a challenge," he said. "Yes, it will continue to be difficult."

The regional government is planning to build 500 more units by the end of 2013, on top of 1,500 units built since 2001.

A high demand for units in Waterloo's student neighbourhood is nothing new, said Mike Belanger, director of residence services at Wilfrid Laurier University.

Although Waterloo has the lowest vacancy rate in the region at 1.1 per cent, he thinks developers are keeping pace with demand. As the student population increases, so has the growth of off-campus student housing.

Windsor has the highest vacancy rate in the country, with 14.6 per cent. The lowest is in Kelowna, B.C., with a rate of 0.3 per cent.

December 15, 2008 - April Robinson, RECORD STAFF - arobinson@therecord.com