We have seen countless number of news stories about unaffordable rental rates in Metro Vancouver. It’s a hot subject in the media and with local politicians. The rent has been steadily increasing for a long time. But it seems that in the last coupe of years it has really “shot up”.
Local residents don’t know how to deal with such rent increases. There even is a tenants union that has been created back in April of 2017.
City of Vancouver is trying to deal with a problem by passing a foreign buyers tax, a vacant home tax and regulations for short-term rentals. Last week the city has released their 10 year housing strategy. The new strategy will encourage developers to build more rental suites within their “for sale” buildings. It will also promoted more co-ops and affordable living units. Many critics says the new strategy is not aggressive enough. But it’s a good start.
In my opinion, the rental rate increases we’ve seen in the last 4-5 years are not the end of it. CBC news wrote an article about the rent increases in the last 5 years. This article also includes census of rental increase by a neighbourhood in Metro Vancouver from 2011 to 2016. Most neighbourhoods went up in rent by 30-50%. That’s a big increase in only 5 years. Full article: here.
Condo prices in the last 12 months in most Metro Vancouver neighbourhoods have gone up by 30-45%. These price increases will have upward pressure on the rental market. I think we are going to see huge rental rate increase in the next 24-48 months and beyond. And the real estate condo market is not showing any signs of slowing down in the near future.
I would not be surprises to see 50-60% increase in rental rates in Metro Vancouver over the next 3 years. Especially since we are currently at close to zero vacancy rate.
All of the proposed and implemented changes and taxes are a good steps but they are too late. The city is reacting to the huge price increases that already took place. The bottom line is that huge rental rate increases are not over. Even if the real estate market prices don’t increase any more, we will still see an increase in the rental rates as a reaction to the condo market price increases that already took place.