Victoria's rental apartment vacancy rate has taken a tumble and investment condo rates have slipped as developers re-energize the local rental industry with purpose-built stock.

According to statistics released by the Canada Mortgage and Housing Corporation (CMHC), the capital region's rental vacancy rate has been slashed by nearly one-third to 0.6% in October of this year from 1.5% in October of 2014. The drop has also placed upwards pressure on the average rent for a two bedroom apartment by $32 per month to a total of $1,128.

However, prices have eased in the condominium rental market with a drop from an average two bedroom rental rate of $1,289 to $1,278. The easing of rental rates is likely attributed to increased competition from new-build rental homes as developers rush to provide purpose-built apartments throughout the region.

According to Citified's data, 643 purpose-built rentals are currently under construction in downtown Victoria with another 390 planned. Throughout the south Island over 1,150 rentals are under construction with an additional 1,430 in planning.

The explosion of purpose-built rental developments is tied largely to favourable lending conditions due to low interest rates and a regional under-supply of quality rental homes. Victoria's rental industry has not seen significant additions to the housing stock since the 1980's, giving rise to the popularity of condos-turned-rentals. C

 Article resources

• Stay up-to-date on local rental industry news and issues via VibrantVictoria's discussion forum
• For the most complete new-build real-estate listings refer to Citified for condos, rentals, houses and commercial properties
• Refer to Citified's data for the latest figures on the local real-estate industry
• For the full CMHC rental data, click here
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