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With the release of the latest Canada Mortgage and Housing Corporation’s rental market report, residents of Metro Vancouver, and those looking to move into the city, will find some disappointing yet unsurprising news: there are simply next to no available apartments and condos to rent in the city.
According to the report, vacancy rates for all bedroom sizes is at 1%, with 1 bedroom apartments offering the highest vacancy rate at 1.1%. And while the country as a whole is already seeing a rental vacancy rate crisis at 2.4%, Metro Vancouver’s rate is more than twice as low.
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Though the current rate is indisputably low, it actually represents a 0.1% increase from 2017’s 0.9% vacancy rate. There has been an increase in purpose-built rental developments, and many more projects are under construction. In fact, the total number of rental units increased by a net of 793 units in 2018. But such a small number of new units amount to a drop in a very deep bucket. Those units were not evenly distributed across Metro Vancouver, and certain areas such as the Tri-Cities region and Burnaby actually saw a net loss of rental units of 399 and 177 respectively.
Such a low vacancy rate in Vancouver is not a new phenomenon. Even after accounting for all new rental unit complexes built over the past 5 years, vacancy rates has hovered at or around 1% over the same period of time. And there are no signs of that changing any time soon either.
Because of the improved economy in other provinces, interprovincial migration to B.C., and by extension Metro Vancouver, has slowed down. But Vancouver’s strong economy continues to attract new residents both foreign and domestic, and still has a net positive growth. All of those new residents cause an upward pressure in housing demand, since they too need place to live. But with the city’s expensive real estate, the current strict standards for new mortgages, and increasing interest rates, even entry-level homes remain unaffordable to individuals with an average Vancouver income. Thus the options for housing for a large chunk of Vancouverites, both new and old, will remain restricted to apartments and rental condos.
That high demand for rent continues to push average rents up. Rent has increased by 6.2% across the board and currently sits at $1,385 on average for all apartment sizes. “The apartment vacancy rate remained low but edged higher as supply increased more than demand; meanwhile, rents continued to increase” said CMHC analyst Eric Bond.
Long-term rental apartment condos saw a decline in total inventory available by 1,081 units. With the city’s strong resale market in condos and the growing popularity of short-term vacation rentals, many condo owners have sold, or repurposed their units effectively removing them from the long-term rental market. As a result, vacancy rates for apartment condos are at a minuscule 0.3%, and the average rent for them has gone up to $1,855.
Sometimes it can be difficult to predict how the market will behave in the coming years. But in the case of Vancouver’s rental market, it’s quite the opposite. As we have said before, we have plenty of reasons to believe that it’s always a good time to invest in Vancouver’s rental real estate market. This latest report by the CMHC gives us even more evidence to the fact.