A senior policy analyst with the Canada Mortgage and Housing Corporation says it's tough to tell exactly when P.E.I.'s vacancy rate will rebound.
According to recently released data by the CMHC, the Island had a vacancy rate of 1.2 per cent last October.
Chris Janes said in a market like P.E.I., the ideal vacancy rate is between three and five per cent.
"Within that range, renters are able to find adequate rental accommodations or apartments and the buildings are still able to earn a normalized return on their investment," Janes said. "So they're not losing money by having units vacant."
However based on a "normal housing cycle," getting to that three to five per cent rate won't happen overnight.
"It typically takes a minimum of five years before we see any type of a housing market dynamic come back to a normal equilibrium, where we have adequate supply and still have adequate demand to absorb that supply," Janes said.
He said in situations where vacancy rates approach close to zero, there should be a focus on building affordable housing.
"Obviously the market can't keep up to demand as quickly as some people may hope or like."
He said when vacancy rates are low it becomes very profitable for multi-unit constructors to build new supply and eventually that will lead to a "more normalized rental market."
"Near zero is not good for anybody. I would say now … at 1.2 per cent it's still very low," he said.
People 'unable to find adequate accommodations'
Janes said while the vacancy rate on P.E.I. and in Charlottetown is better than it was a year ago, it is still not good.
"Unfortunately there's a lot of people I think in P.E.I. right now, and Charlottetown in particular, who are still unable to find adequate accommodations — affordable rental accommodations," Janes said.
He said a lot of the new buildings going up on P.E.I. are "not cheap."
"We need to start to focus on affordable rental housing in situations where we see near-zero vacancy rates, and that's really right across the country right now in most major centres," Janes said.
He said it's important for all levels of government and the private sector to work together to solve the issue.
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