In Metro Vancouver, renters are grappling with escalating costs and a persistently low vacancy rate, which remains one of the most challenging in Canada. The Canada Mortgage and Housing Corp. (CMHC) recently revealed in its 2024 Rental Market Report that the vacancy rate for the region stayed at 0.9%, mirroring the figures from 2022.
This stubbornly low availability is occurring amid a backdrop of considerable rent increases. The average rent for a two-bedroom purpose-built apartment was recorded at $2,181 in 2023, with condo apartments of the same size averaging $2,580.
The rental market’s strain is further evidenced by the decreased turnover rate, which dropped to 8.1% in 2023 from 10.7% in the previous year. This indicates a tightening grip on available rental units, with fewer opportunities for new tenants.
Contributing to the pressure are factors such as significant population growth, heavily influenced by immigration, and elevated mortgage rates that have postponed the homeownership dreams of many first-time buyers.
“Rental demand was driven by record immigration and decreases in homeownership affordability,” the CMHC notably emphasized the impact of immigration on the housing situation.
“This surge in immigration is in line with what was observed in other major centres in Canada and drove rental demand in those regions. In British Columbia, most new immigrants settle in Vancouver.”
The real estate landscape has also seen a downturn, with home sales falling 23.4% below the ten-year average last year. This slump is juxtaposed with a spike in international migration to British Columbia, particularly in the first half of 2023, which saw a 56% increase compared to the same period in 2022. Most of these new immigrants chose Vancouver as their new home, further fueling the demand for rental housing.
The CMHC report also highlighted the exacerbated affordability issues for low-income households, who face even lower vacancy rates for affordable units and already allocate a significant portion of their income towards rent. The rising costs of mortgages and the increased income requirements have likely kept potential buyers within the rental market longer than anticipated.
Comparatively, Toronto ranked as the second most expensive city for renters in Canada, with an average rent of $1,961 for a two-bedroom purpose-built rental. Montreal stood on the other end of the spectrum as the least expensive major city, with two-bedroom homes averaging $1,096 monthly.
On a national level, despite the increase in overall rental unit supply, demand still outpaced supply for the second consecutive year. 2023 saw a record-low vacancy rate of 1.5% and a record-high average rent growth of 8%.
Information for this story was found via CMHC, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
