The already extremely low rental vacancy rates in Vancouver Census Metropolitan Area (CMA) have fallen even further, now standing at 0.7 per cent for all rental units, down from 0.8 per cent a year ago, according to a report issued November 28 by the Canada Housing and Mortgage Corporation (CHMC).
That number falls even further when looking at investor-owned rented condos, which now have a vacancy rate of just 0.3 per cent, said the federal housing agency.
Vacancy rates for various cities and neighbourhoods within the Vancouver CMA vary from a high of 1.7 per cent in the Tri-Cities to 0.0 per cent in the University Endowment Lands. Downtown Vancouver’s rental vacancy rate is 0.5 per cent.
The report said, “Strong employment growth, population growth and rising entry-level home prices support strong demand for rental properties. Strong demand for rental accommodation has outpaced new additions to the supply, pushing vacancy rates lower for both primary rental apartments and rental condominium apartments.”
It added, “Increases in entry-level home prices during the past year may have also indirectly shored up demand for rental housing.”
The tightening of the vacancy rate has put upward pressure on rental prices, which are up 6.4 per cent on average compared with last year, to an average of $1,223 for all unit types across the CMA. Prices cited in the report range from an average $728 per month for a studio in Surrey, up to an average of $3,030 for a three-bedroom unit in the City of Vancouver.
Rental prices rose to an average of $1,625 per month for an investor-owned condominium apartment in the Vancouver CMA – again, varying widely by size of home and sub-area.
The annual rise in prices is significantly above the 2.9 per cent allowable increase in rents for existing tenants, “suggesting that new leases were signed by many tenants, often following significant building upgrades and renovations,” according to the CMHC.
The news follows the City of Vancouver's new Empty Homes Tax announcement, which will start in January 2017. The new policy aims to add thousands of currently empty properties to the rental pool to increase the rental vacancy rate and ease pressure on prices.
To read the full CMHC report, including breakdowns of vacancy rates, turnover rates and prices by property size, age and location, click here.