Rents increase as apartment vacancy rate falls in Vancouver
Analysts say new arrivals to the province are keeping vacancies low
Vancouver Sun, with files from Canadian Press
December 22, 2004
Vancouver's apartment vacancy rate plunged to a mere 0.6 per cent in 2004, a steep decline that runs contrary to a national trend.
Vancouver's tightened vacancy rate was echoed in other places in the Lower Mainland, with the overall apartment vacancy rate falling to 1.3 per cent compared with two per cent a year ago.
The average rent on a one-bedroom suite in Vancouver rose to $823 per month from $805, and rents across the city averaged $863 per month, up 2.1 per cent from a year ago.
The vacancy rate, measured by Canada Mortgage and Housing in an annual survey conducted every October, counts only vacancies in apartment buildings and townhouses built strictly to be rented.
The survey does not include privately rented accommodations such as houses, basement suites and strata-title condominiums.
"I don't know if it is that sharp of a drop," Cameron Muir, senior market analyst at CMHC said. "It is significant enough for us to take notice.
"The purpose-built rental stock itself has been pretty much the same number for years. The only additions to units to come on are on the informal side."
He added that the vacancy rate is being kept low because new arrivals to the province are renting before buying because of limited housing supply in the tight housing market.
Also, many buyers who purchased condominiums in pre-sales are still waiting for their homes to be completed and continue to take up rentals.
Muir said the addition of basement suites and investor-owned condominiums to the informal market, which CMHC does not measure, is "taking up some of the slack in terms of supply out there."
Some who operate in that market estimate that investor-owned condominiums, particularly in Vancouver, boost the real rental vacancy rate to five per cent or as high as eight per cent.
Howie Charters, director of commercial realtor Colliers International's consulting evaluation department, has heard reports that between 30 per cent and 60 per cent of condominiums being built downtown are being purchased by investors who intend to rent.
He added that many of the buyers who plan to move into their new condos will soon move out of rental suites freeing up the accommodation for others.
"It is a bit of a renters' market out there," Charters said.
Alan Moody, president of the relocations division at Trillium Real Estate Corp., guessed that the vacancy rate among all properties being rented could be as high as eight per cent based on the amount of time it takes him to rent suites and some slight rent reductions he has seen offered.
However, he said that his company is busy and confirmed that one of CMHC's explanations for the declining vacancy rate -- in-migration of people -- is accurate.
"I'm seeing more out-of-towners because we're seeing more people being hired by the companies, and they're bringing them in from everywhere," Moody said.
Mark Wilton, a 28-year-old marketing manager with Creo, is one of those newcomers, having moved to Vancouver from Sydney, Australia in September.
He is splitting the less-than-$1,000 rent on a ground-floor suite in North Burnaby with a colleague at work and said he had little difficulty finding it.
Wilton said he had specific requirements as far as location and parking were concerned, and there were "quite a number of properties in that range back in October. Enough to be choosy."
However, the picture is not as rosy for people in the bottom social strata who depend on dedicated rentals.
Kris Anderson, a staff member at the Tenants Rights Action Coalition said Vancouver's rental vacancy has historically been notoriously low, something his agency hoped was changing.
Anderson said low vacancy rates mean people looking to get out of bad rentals have less choice. He added that rents have also increased every year while social services have been cut and incomes don't seem to be rising as quickly.
"For low-income people, seniors and people with disabilities, certainly for them [the rental situation] is a crisis, but it's a crisis for all those combined factors that are making it more expensive to live here," Anderson said.
British Columbia had the tightest metropolitan rental market in the country. The Victoria vacancy rate fell by 0.5 a percentage point to 0.6 per cent.
In the Lower Mainland, would-be renters would have had an easier time finding a place in Surrey, which had a 5.1-per-cent vacancy rate and average one-bedroom rent of $618 a month.
Delta, with a 4.1-per-cent vacancy and $656-per-month rent on a one-bedroom suite, was next.
New Westminster's vacancy rate dropped to 2.4 per cent from 2.8 per cent in 2003 and the average one-bedroom suite rented for $652 per month.
Burnaby saw its vacancy rate drop one-tenth of one per cent to 1.4 per cent with a $709 average one-bedroom rent.
Among other Canadian cities, Edmonton saw its vacancy rate climb to 5.3 per cent from 3.4 per cent. Calgary's dipped slightly to 4.3 per cent from 4.4 per cent. Toronto's vacancy rate jumped to 4.3 per cent from 3.8 per cent and Halifax's vacancy edged up to 2.9 per cent from 2.3 per cent.
© The Vancouver Sun 2004