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Renters are paying more and more, a new survey shows, even though the supply of rental housing is increasing in Metro Vancouver and across B.C. According to the annual rental market report by the Canada Mortgage and Housing Corporation (CMHC), vacancy rates in B.C. rose to 1.4 per cent this year from 1.3 per cent last year as more rental supply came on the market. The demand for more supply was driven by population growth, especially among those aged 20 to 34 and over 65. But the findings show that more supply doesn’t necessarily lead to lower or stable rents.
In Vancouver, roughly 800 units of rental housing were added between October 2017 and October 2018, increasing the vacancy rate to 1 per cent from 0.9 per cent last year. Yet the average rent among all unit sizes reached $1,385, up by 6.2 per cent — more than the typically allowable increase of 4 per cent set for this year.
The survey shows that the average two-bedroom rent sits at $1,600. For a three-bedroom unit, it’s $1,900.
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More supply should lead to lower rent in theory, said Eric Bond, manager of market analysis at CMHC, but the change in the vacancy rate is “not that great.”
“The 6.2 per cent increase also includes units that have turned over to new tenants and the landlord has raised the rent to the market level. In doing so, they can often raise it by more than 4 per cent because they’re not restrained in that way.”
This increase “poses challenges for affordability in the region,” Bond added.
“In terms of the number of the units that turn over every year, about one in seven rental apartments change tenants over the past year. And so it’s when someone is looking for a new place that they’re going to see the largest increase in rent compared to, say, if they’ve been a long-term tenant for the previous decade or something like that.”
The survey also measured investor-owned apartment condominiums as a component of the secondary rental market supply in Vancouver, Victoria and Kelowna. The report concluded that, generally, the condominium rental market recorded higher rents than purpose-built rentals.
The investor-owned units are “typically in newer buildings with more amenities not found in older purpose-built structures. Vacancy rates for rented condominiums remained low in 2018, with Vancouver, Victoria and Kelowna CMAs (census metropolitan areas) all recording a vacancy rate below 1 per cent.”