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Vacancy rate holds, rents continue to rise across Metro Vancouver: report

Last Updated Nov 28, 2018 at 6:37 pm PDT

Summary

Latest report by the CMHC shows the vacancy rate across Metro Vancouver increased slightly, but it remains very tight

The CMHC says strong demand in the Metro Vancouver rental market kept the vacancy rate at or just below 1 per cent

VANCOUVER (NEWS 1130) – It is hard to believe a vacancy rate of just one percent is progress, but it’s at least a slight improvement for the tight rental housing market in Metro Vancouver and parts of the Fraser Valley.

The Canada Mortgage and Housing Corporation’s 2018 Rental Market Survey shows renters still face a lot of pressure as the strong local economy and the high cost of entry-level home ownership continue to have an impact on monthly housing.

“The apartment vacancy rate in Metro Vancouver remained low at one per cent, but we did note it edged higher as supply increased more than demand over the past year. This is, however, the fifth consecutive year that vacancy rates have been at or below one per cent,” said Eric Bond, CMHC’s principal market analyst for Vancouver, adding that rents have also continued to rise significantly.

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“The average apartment rent paid increased by 6.2 per cent over the past year [to $1,385 per month]. That reflects both increases for existing tenants, where the maximum allowable increase was four per cent, as well as increases to the market level when a unit turns over to a new tenant,” he told NEWS 1130.

Bond says there are currently more than 8,000 new rental units under construction in Metro Vancouver with approximately 2,500 of those secondary suites and 5,500 primary rental apartments that should come onto the market within the next one to three years.

However the report finds the number of rental units fell in the Tri-Cities and Burnaby in 2018, by 339 and 177 units respectively, because of demolitions and renovations.

“On the whole, however, Metro Vancouver as a region saw a net increase of almost 800 purpose-built rental units over the past year,” he stated.

CMHC also found the number of condominiums in Metro Vancouver used for long term rental has declined.

“That is because investors either sold or repurposed their properties over the past year, with some of the strong resale market price gains we have seen over the recent years. This decrease in the number of condos available in the secondary market has put further pressure on vacancy rates in the region.”

In the Fraser Valley, Abbotsford’s vacancy rate improved from 0.2 to 1.0 per cent as new units were built.

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“While that is certainly still low in absolute terms, we have seen some new projects complete in Abbotsford-Mission over the past year and as they are renting up, we have seen the vacancy rate increase.”

Unfortunately that has pushed up rents in Abbotsford by 7.9 per cent to an average $924 per month..

“This is fairly elevated but it reflects the newer units that have come onto the market and the new supply that we have available.”

The CMHC points out Abbotsford is growing fast, with the population projected to have increased by 1,700 people over the past year, setting up more than 1,300 new households, 380 of which likely to be rental households.