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The annual Canada Mortgage and Housing Corporation (CMHC) rental market report has grim news for the Vancouver housing market… unless you’re a landlord.
An average rent for a two-bedroom apartment for a purpose-built unit is $2,002 in Vancouver—the highest in the country. For condos, a two-bedroom in Rain City leaps up to $2,504 on average.
That’s 59 per cent higher than the national average rent for a purpose-built rental, and 30 per cent higher for a condo.
“Strong demand for limited rental units means low vacancy rates, rising rents and growing inequality between long-term leaseholders and newcomers,” Eric Bond, a CMHC senior specialist quoted in the report, said about the city’s rental market.
The vacancy rate is also low: the purpose-built rental vacancy rate is 0.9 per cent, half of the national average of 1.9 per cent. And those units on the rental market are markedly more expensive than they used to be.
“Asking rents for vacant units are now, on average, 43 per cent higher than those paid for occupied units,” the report noted. “New renters paid, on average, 24 per cent more than the previous tenant for two-bedroom units rented in 2022.”
In other words, if you think $2,002 sounds low for rent on a two-bed, you’d be right: it’s an average of all units, meaning long-term renters who’ve locked in lower year-on-year rent increases are paying considerably less than people moving into new apartments.
In Vancouver, the gap between rent increases in units that “turned over” (to a new tenant) and units that had an occupying tenant was 23.9 per cent vs 3.9 per cent, respectively.
And on average, the average asking rent for vacant units was 43 per cent higher than the average rent for occupied units—a huge uptick from the 10 per cent gap in 2021.
“There’s rent control in place to help tenants who are in their places, but as soon as they have to move or they’re evicted … the rent goes up by 10, 20 per cent,” Anastasia French, provincial manager of Living Wage for Families BC, told the Straight last year.
Rent control, or vacancy control, has long been suggested as a way to curb this rent increase when units are turned over. Advocates like the Vancouver Tenants Union, Living Wage for Families BC, the Canadian Centre for Policy Alternatives, and the BC Poverty Reduction Coalition say legislation that ties annual rent increases to units, rather than existing tenants’ contracts, would eliminate this gap and make housing more affordable.
But provincial Housing Minister Ravi Kahlon said in an interview with the Straight last December, when asked about vacancy control, that he was “not entirely sure that we’re going to go in that direction.”
Occupied units in BC had allowed rent increases of 0 per cent in 2021, 1.5 per cent in 2022, and 2 per cent in 2023. However, two-bedroom apartments that didn’t turn over increased their rents on average by 3.9 per cent. The CMHC report suggested this was “because of supplemental increases that are allowed for capital improvements to the structure.”
Metro Vancouver saw 3,085 new purpose-built rental units in 2022, including 1,359 in Vancouver, the highest annual increase since 1990. But those new rentals had average asking rents ($2,823) that were almost identical to average rents for all existing two-beds ($2,865), suggesting landlords felt confident in jacking up rents to compete with new units rather than trying to undercut them.
But few of these new units are affordable. Less than a third of the new purpose-built rentals are affordable to households earning below $55,000 per year, and only 0.5 per cent of the units are affordable to renters with the lowest 20 per cent of income, according to CMHC data. Or, for one in five households, only one in 200 units is affordable.
By comparison, Québec City and Montreal have 25 per cent and 23 per cent of their housing as affordable for low-income renters.
The takeaway is probably that you’d better hope your rat-infested basement suite with no natural light isn’t on the verge of being actually uninhabitable, as you probably can’t afford anything better right now. Try again next year!