6.4% rent increase in Metro Vancouver is highest ever recorded: CMHC
A yearly survey confirms what many renters already know: it became harder and more expensive to find a place to live in Metro Vancouver in 2016
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In 2016, rents in Metro Vancouver increased by 6.4 per cent — the steepest rise ever tracked by Canada Mortgage and Housing Corporation.
Rent rates normally increase at about the same rate as British Columbia’s provincially regulated cap on yearly rent increases, which is currently 2.9 per cent.
But last year, rents rose 3.9 per cent, outstripping the rent cap. That trend has continued in 2016, said Robyn Adamache, principal market analyst for CMHC.
“2008 was the last time we had an increase in rents of more than 4 per cent, and that’s when the vacancy rate was 0.5 per cent,” Adamache said. The 6.4 per cent increase between 2015 and 2016 is “the highest I’m seeing back to 1992.” The highest rent increase in the region was in the City of Vancouver, at 7 per cent.
As a comparison, rents in the Greater Toronto Area increased 3.1 per cent.
CMHC’s survey confirms what Tom Davidoff, an economics professor at the University of British Columbia, tracked earlier this year by collecting Craigslist rental listings: in 2016, Vancouver rents shot up, mirroring the steep increase seen in house and condo prices between 2015 and 2016. Craiglist data shows that in April, the average one-bedroom on the site was listed for $1,500; by November, that had risen to $1,800, a 16 per cent increase over just eight months.
CHMC’s October 2016 survey shows that vacancy rates, already very low across Metro Vancouver, tightened further in most municipalities. The vacancy rate eased slightly for Vancouver, Richmond and the Tri-Cities (Coquitlam, Port Coquitlam and Port Moody) but worsened in all other Metro Vancouver municipalities. In Delta and in the UBC Endowment Lands, the rental vacancy rate fell to zero.
According to CMHC, the average price of a one-bedroom apartment in the City of Vancouver is now $1,268, compared to $1,175 in 2015, while the average price of a two-bedroom is $1,757, compared to $1,643.
After many years of little new rental supply, the past four years has seen steady growth in the number of new purpose-built rental buildings, with 2016 setting a new record. New construction added 922 units, but 90 per cent of those were built in the City of Vancouver, Adamache said.
Metro Vancouver has seen both strong employment and population growth, trends that are expected to continue. Demand for rental is still outstripping new supply.
The vacancy rate in the condo rental market is even lower than in the purpose-built market, falling to just 0.3 per cent in 2016 from 0.9 per cent in 2015. While 5,000 new condo rentals are usually added every year, in 2016 only 1,000 new rentals came on the market.
“That would line up with the fact that condo prices on the resale market have been rising for the last year or so,” Adamache said, meaning that it’s now more attractive to sell an investment condo than rent it out.