On November 28th, Canada Mortgage and Housing Corporation released its Fall Rental Housing Market Report for the Census Market Areas of Vancouver. CMHC releases these reports semi-annually, and the lengthy document contains a great deal of statistical information that should be of interest to landlords and tenants alike.
The report details a rental market which tightened further this year as strong employment growth, population growth and declining home sales (especially at entry level prices) contributed to even stronger demand for rental accommodation, which outpaced additions to supply. This has put upward pressure on rents, in spite of increased starts of purpose built rental housing.
As a result, the overall rent change (increase) in the CMA was 6.2% - well above the 2018 allowable increase of 4.0% as set by the Residential Tenancy Branch. This was driven by a strong job market, and even though employment growth increased by only 1.2% - down from previous years - an unemployment rate of 4.3% places upward pressure on housing and rental demand. However, improving economic performance in other Canadian provinces has resulted in lower net interprovincial migration into the Vancouver Census Market Area (CMA).
Highlights of the Fall 2018 Report include:
• Average rental increases through the Vancouver City neighbourhoods ranged from 3.6% (University E.L.) to 8.3% (English Bay), with a City average increase of 6.1%.
• Over the entire Vancouver CMA (from the North Shore, to Langley, Delta, Tri Cities/Pitt Meadows), Average Rents increased by 6.2% - well above the allowable 2.9% for existing tenants allowed in 2016 by the Residential Tenancy Branch.
• The overall Vacancy Rate in the total Vancouver CMA increased to 1.0% from 0.9% in 2017, and up from 0.7% in 2016.
• For “Investor Held” rental condos, the Vacancy Rate remained at 0.3%, while the average rent for condominiums rose to $1,855 - up from $1,758/mo in 2017.
• 793 new, purpose-built rental units were added to the rental condominium stock in 2018, compared to almost 1,850 units in 2017. Purpose built apartments now constitute about 5% of total rental units.
• Private Apartment Turnover Rates remained in a fairly tight range in Vancouver (between 8.4% & 16.2%), while being highest in Richmond (19.4%) & Delta (33.3%), with an average of 14.1% over the full Vancouver CMA.
Summary of Key analysis findings:
1. “The apartment vacancy rate remained low but edged higher as supply increased more than demand; meanwhile, rents continued to increase.” (Eric Bond, Principal, Market Analysis).
2. Strong demand kept vacancy rates lower for both primary rental apartments and rental condominium apartments.
3. The supply - demand dynamics have put upward pressure on rents in the region.
4. Financial barriers for entry-level homeownership is keeping some in rental housing.
Included in this Fall 2018 report are specific details on rental and vacancy rates by municipally and neighbourhood, unit type, and structure size. As well, there is data and charts on turnover and availability rate, and much more data than most people would need or want! CMHC offers to supply these and their other housing reports via email for free by subscription, as they are released at their website. Another great service by one the very valuable and useful Government organizations. It is gratifying to see our tax dollars put to such good use!
For the full CMHC VANCOUVER RENTAL MARKET REPORT FALL 2018 - click here.
If you are looking to sell or buy real estate or wish to discuss further any topic on Real Estate, please call Bob Bracken at 604-220-2035 or 604-263-2823.
Printable PDF of this article - click here.