The City of Vancouver has spent the past decade encouraging the development of purpose-built rental stock, but demand has proven far too voracious to keep pace, and as homeownership becomes more financially prohibitive from month to month, the pool of tenants continues to grow.
“Right now, are there any tenants who would normally have bought their own home just a few years ago? Absolutely,” said Ron Antalek of RE/MAX LifeStyles Realty, a 33-year veteran realtor. “The solution is to create more housing, speed up building permits and build better and faster.”
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As a result, there are a growing number of Vancouverites who are unable to move up the housing ladder beyond the rental rung and are grappling with unforgiving supply and demand realities, rendering concerted efforts futile. municipal authorities to mitigate the rise in rental rates.
Vacancy rates remain very tight
Metro Vancouver’s vacancy rate was 1.2 per cent at the end of 2021, down from 2.6 per cent a year earlier, which Eric Bond, senior market outlook specialist at the Canadian Housing Corporation Mortgage and Housing (CMHC) told STOREYS was an anomaly despite its good health. below equilibrium conditions.
“We’ve seen the vacancy rate in downtown Vancouver, in particular, go up to 4%, which might not seem like much, but for downtown Vancouver it’s pretty high,” he said. he declares. “We’ve seen that vacancy rate fall back in 2021 to 1.6% in downtown Vancouver and 1.2% for the region as a whole.”
Bond’s remarks elucidate the difficulties a growing region with some of the highest property prices in the world has in providing enough housing for its residents. Since around the early 1980s, many Canadian cities have stopped building enough purpose-built rental housing, and that is why investor-owned condominiums have become crucial to the rental ecosystems of cities like Vancouver and Toronto – the latter having the same problem in helping its tenants move up the housing ladder. Although purpose-built rental construction in the city of Pacific Rim has begun to move in the opposite direction in recent decades, it remains stubbornly, relative to robust demand, a scarcity.
Ongoing efforts to scale up existing units
But the aging purpose-built rental stock in the area is also being gradually modernized, and backstreet rental housing on single-family lots in the city is seeing significant growth, as the recent Housing Supply Report indicates. of CMHC. Of the featured single-family homes in Metro Vancouver last year, 13% contained laneway units, along with other ancillary suites like basement apartments or garden suites. While the derived supply acquired is insignificant compared to the bigger picture, the exorbitant costs of owning in Vancouver – the benchmark price of a single-family home in the region rose 20.8 year-over-year. another in April to reach $2,139,200 – prompted the development of these secondary units.
“Certainly the condominium type still accounts for the majority of new construction in Metro Vancouver, but we’ve seen the rent share increase significantly over the past decade,” Bond said. “It is welcome for the region to diversify its housing stock and renew the old rental stock, many of which were built — and this is the case for many cities in Canada — before 1980, with very few built in over the past three decades. . We are now witnessing an upsurge in rental construction.
The housing supply report revealed that the development of rental apartments in the city of Vancouver hit an all-time high last year, and outside the urban core of Surrey and Burnaby there are also plenty of new constructions. Taking into account the main principles of 21st century urban planning, new rental construction is concentrated near public transit corridors.
But until the supply of rental units becomes sufficient to break the years-long imbalance that has put upward pressure on rental rates, and finally meet demand, apartment leases close to public transport will continue to become more and more expensive to sign.
And while laudable efforts have been made to increase rental supply over the past 10 years, Bond says it’s still far from enough.
“But we will also need additional densification and purpose-built rental construction for apartment buildings to meet some of this strong rental demand in the area.”
Neil covered housing and real estate for several years as a Toronto-based journalist. Prior to joining STOREYS, he was a regular contributor to the Toronto Star, Toronto Sun, National Post, Vice, Canadian Real Estate Wealth and several other publications. Do you have a real estate history? Email him at [email protected]
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