Vancouver rental vacancies up in 2020, but affordability still a ‘significant’ challenge: CMHC
Tiffany Crawford
The Vancouver Sun
Rental vacancy in Vancouver opened up in 2020 because of the pandemic, but the cost of new rentals spiked. Photo by Francis Georgian /PNG
Metro Vancouver’s vacancy rate was up in 2020 fuelled by higher supply and lower demand because of the COVID-19 pandemic, but affordability remained a challenge, according to a Canada Mortgage Housing Corporation report.
The report, published Thursday, says the purpose-built rental apartment vacancy rate in Metro Vancouver increased to 2.6 per cent in 2020 from 1.1 per cent in 2019.
Newer structures drove the increase in the vacancy rate, particularly in the cities of Vancouver and Surrey, while vacancy rates decreased in suburban markets such as Langley and White Rock, according to the report.
CMHC says the pandemic has lowered rental demand in Metro Vancouver in part because of employment losses among younger people and workers in service industries.
Also, migration to the region has slowed with international borders closed, and many international students have returned home to study online.
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For example, CMHC says at the University of British Columbia, the purpose-built rental apartment vacancy rate increased to 13 per cent in 2020, from 0.4 per cent the year before.
CMHC also notes that a combination of market forces and housing policies from different levels of government have led owners to convert their properties to long-term rental, creating new supply.
With lower demand for short-term vacation rentals due to less tourism, “it is likely that some of these conversions are the result of investors now choosing to rent their units to long-term tenants,” the report says.
The pace of average apartment rent increased by two per cent; however, that was down from 4.7 per cent in 2019. While the pace slowed, cost was still a major problem, especially for newer tenants, the report finds.
The average asking rent for vacant units is now 21.4 per cent higher than the average rent paid for occupied units, according to the report.
“This gap suggests that market rents currently faced by prospective tenants continue to see upward pressure following several years of strong demand that raised rents significantly, while tenants remaining in the same unit only face rent increases in line with the provincially allowable amount,” the report states.
Given this reality, the report suggests longer-term tenants with lower-than-market rents may be less inclined to move.
The report concludes that while more rentals became available in Metro Vancouver, affordability remains a significant challenge, especially for lower-income renters.
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Only two per cent of Metro Vancouver rental apartments would be affordable to households that earn under $25,000 a year, while those earning under $47,000 a year can only afford about 23.9 per cent of the rental stock available, the report finds.
Of these units, only 12 per cent have two or more bedrooms, “highlighting additional challenges for families with incomes in these ranges,” the report says.
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