Vacancy rate plummets in Vancouver and other areas of Lower Mainland

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      Vancouver's antidensification zealots and suburban mayors still outlawing secondary suites and laneway houses might want to pay attention to the latest news release from Canada Mortgage and Housing Corporation.

      It shows some shockingly low rental vacancy rates, which can only mean one thing. Rents will likely be going up for tenants once this news reaches local landlords.

      In Vancouver's West End, the vacancy rate plunged from 0.9 percent to 0.3 percent from October 2013 to October 2014. The average two-bedroom rent in the West End has reached $1,849 per month, up from $1,794 a year ago.

      Across all of Vancouver, the rate fell from one percent to 0.5 percent. An average two-bedroom unit rents for $1,571 per month on a citywide basis, according to the CMHC.

      At the University Endowment Lands, the vacancy rate is a microscopic 0.2 percent. Rents for two-bedroom units around the Point Grey campus average $1,917.

      Vancouver legalized secondary suites in single-family zones more than a decade ago. Burnaby brought in its secondary-suite program as part of its 2011 official community plan.

      In Burnaby, the vacancy rate fell from two percent to 1.3 percent from October 2013 to October 2014. The average two-bedroom unit there rents for $1,188 per month.

      New Westminster, which was an early adopter of secondary suites, saw its autumn vacancy rate fall from 2.2 percent to 1.4 percent over a one-year period. Two-bedroom units rent for an average of $1,157 in the Royal City.

      The City of North Vancouver's vacancy rate is down to 0.5 percent from 0.9 percent a year ago. In the nearby District of North Vancouver, the vacancy rate fell even further, dropping from 1.3 percent to 0.3 percent from October 2013 to October 2014.

      Richmond also posted a big drop, down to 1.6 percent from 2.7 percent. And Surrey, which has a huge number of rental units, fell from 4.4 percent to 2.5 percent.

      A two-bedroom unit in Surrey rents for $926, which is the second-lowest in the region.

      Maple Ridge and Pitt Meadows remain the most affordable areas for tenants, with a two-bedroom unit renting for an average of $886 per month.

      Between 2006 and 2011, an average of 42,225 immigrants per year arrived in the Lower Mainland. In the meantime, the aging of the baby boomers has resulted in a sharp increase in the number of empty bedrooms across the region, according to real-estate marketer Bob Rennie.

      "Empty bedrooms increased by 26 percent over the past decade while housing-stock growth was only 17 percent," Rennie told an Urban Development Institute audience earlier this year.

      The upshot is if rents remain high, young people and others in the labour force will continue moving out of Vancouver in favour of cheaper areas like Surrey, Maple Ridge, and Abbotsford. Eventually, they're going to want to work close to where they live, which doesn't bode well for Vancouver's economic future.

      Whistler has struggled with this issue for many years, relying heavily on young Australians to fill jobs that others won't take because the cost of housing is so high in the resort community.

      Is this really what we want Vancouver's future to look like?

      Comments

      12 Comments

      Mark

      Dec 16, 2014 at 11:04am

      Take a look at how much was built during the last 5 years. A lot of the condos for built for the purpose of being sold to offshore investors who want a place to park their cash. Most of these units are not put into the rental stock.

      How about forcing investors (foreign or local) to rent out their units? Otherwise, you can build as much as you want, it will not make a difference, as it hasn't for the past five years or so.

      Disgusted

      Dec 16, 2014 at 3:51pm

      Mark,

      Per renting out empty condos. San Fran is looking at that very thing.

      God forbid, though, that this developer luvvin' council take that first step for on behalf of the middle middle class.

      0 0Rating: 0

      Jesus

      Dec 16, 2014 at 9:25pm

      I'm living in one of those new condos. Two year old building. Really good price too. Right beside skytrain station. $900/mo with tons of features including own laundry, dishwasher, parking, and fitness club.

      0 0Rating: 0

      Corpse by the bay

      Dec 16, 2014 at 9:59pm

      Vancouver is a piss hole with a tiara.
      The gong show that this city will become in 25 years will make a hilarious dark comedy film.

      tedo

      Dec 17, 2014 at 3:12am

      vancouver is a pitiful backwater with no economic base, no big companies, no attractions and the lowest wages and worst job opportunity in Canada,

      people arent moving there , where are they going to work, vancouver's economy is a laughing stock

      Ronnie Lonnie Ding Dong

      Dec 17, 2014 at 9:32am

      @Mark

      What's interesting is that the same CMHC study found that foreign investors accounted for only 2.3% of condos owned in Vancouver, though the "Burrard Peninsula had 5.8% penetration." Here are the links:

      Percentage of Toronto condos owned by foreign investors is very low, CMHC says
      http://www.thestar.com/business/2014/12/16/percentage_of_toronto_condos_...

      CMHC tackles foreign ownership in Canada’s housing market for first time
      http://business.financialpost.com/2014/12/16/cmhc-tackles-foreign-owners...

      Foreign ownership of Vancouver condos is low: economist
      http://vancouver.24hrs.ca/2014/12/16/foreign-ownership-of-vancouver-cond...

      One article mentioned how just because someone has a foreign accent doesn't mean they are a foreign investor. Personally, I think values have been driven up by the home-ownership-at-all-costs ideal of Canadians, enabled by freely available loans backed by CMHC insurance, and sustained because of the commodity prices we have enjoyed... until now. The fact that people shut out of the property game are so angry at nebulous foreigners is a testament in my mind to the persistence of the ownership ideal.

      Here's the real question that NO ONE is willing to answer: WHY IS LAND SO EXPENSIVE IN THE SECOND-LARGEST COUNTRY IN THE WORLD WITH ONE OF THE SMALLEST POPULATION DENSITIES IN THE WORLD?

      Bruce

      Dec 17, 2014 at 9:57am

      @Ronnie

      There's a big tax benefit to having property registered in the name of a taxpayer who claims to live in it.

      But RE values are high in *cities* all across Canada. In proportion to values in 2002, our region has had the same run-up as most other cities, we're not exceptional that way. It's due to purposeful government policy, as you've said. Running the economy on credit cards.

      0 0Rating: 0

      @Corpse by the bay

      Dec 17, 2014 at 10:47am

      25 years. why wait? this city is fucked now and will never be fixed.

      0 0Rating: 0

      Ronnie Lonnie Ding Dong

      Dec 17, 2014 at 11:06am

      @Bruce

      Well that's the rub. The study doesn't account for a partner living here with children while the other partner and money-earner is off in Honk Kong (of course). Or... at the Boeing plant in Washington or London (let's not forget our British and American dual-citizens). But, if there is a citizen living here and maintaining residence, then that's not foreign investment in the sense of absent housing stock, etc. Those people, and their kids, are immigrants. They spend money here and usually their Canadian children go to school with the children of Canadian-born Canadians. I know many such people. I grew up with them. What's the problem with them?

      What caused me to comment is this scapegoating impulse I see here and elsewhere when, in reality, the way that land is apportioned for development and the way that development is financed has always been a scam to pump up values. The real foreign investors are not some guy buying a condo, it's companies like Concord-Pacific that have had privileged access to politicians since before Expo 86. Why this phony media debate about foreign condo buyers who make up a negligible portion of the market, when the market is being coordinated for high prices through obvious collusion? Do we really know that empty condos are always held by foreign owners, hmmm? Why does the state sponsor the process of development that exists today? Why can't we use more of the land base? Who are these developers and why don't we investigate and publicize their business and political activities more often?

      In Hong Kong, every year, on July 1, pro-democracy activists march, wielding stories-high effigies of Li Kashing as vampire. They're facing the same shit as us, the same companies, another crooked real estate game. So why this scapegoating of this nebulous foreign petty investor who everyone just loves throwing their hate at as the sole cause of their inability to own and who, incidentally, doesn't have much to do with high prices?

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      @Ronnie Lonnie Ding Dong

      Dec 17, 2014 at 12:12pm

      "WHY IS LAND SO EXPENSIVE IN THE SECOND-LARGEST COUNTRY IN THE WORLD WITH ONE OF THE SMALLEST POPULATION DENSITIES IN THE WORLD?"

      Homesteading was eliminated in 1970 in BC, which meant that land became available only by purchase, contrary to even the native custom of BC, which was that anyone could settle unoccupied lands, and, via statute, gain a crown title. But it is by the law of nature that we have right of occupation and title by improvement---see John Locke, Second Treatise on Government, etc.

      Marching in cities isn't really going to change the situation. Homesteading will. The issue today is mostly that the capital to buy the timber on the land isn't there---occupying a few acres, clearing it, building a longhouse, this is the sort of thing people have been doing for thousands of years in BC. The right is annexed to the land, to be enjoyed by the residents, not annexed to the people.

      Consider a town where all of the residents have common in a field, upon which they may dance on Sundays. That right belongs to all of the residents of the town, not just the "native born" of the town. The right to occupy lands in earth is much the same.

      So, to answer your question, there is not one answer: "within the land title system," the answer is that land is too expensive due to artificial scarcity. I'm sure we can figure out who benefits from keeping people mostly in the railway belt. But in general, it is because people are ignorant of their natural right to occupy and improve lands and therefore gain title to them.