housing
NEW RENTAL SUPPLY MEANS VACANCY RATES SOON COULD BE HIGH ER
While increased rental supply is almost always a welcome sight, recent economic trends may drive a wedge between supply and demand.
Early learnings from the Great Suppression are that Metro Vancouver’s for-sale housing market has rebounded with vigour after a brief period of inactive demand, while the region’s rental market may be undergoing more dramatic changes. Ultimately it is the nature of our current economic downturn that has in turn dictated how the markets for goods and services—and homes—have evolved in response. To reiterate some observations noted earlier in this report, the Great Suppression has been marked by significant job losses, yes, but more importantly a tremendous decline in the number of part- time jobs held by younger workers in the hospitality sector. In turn, the fact that the prevalence of renting is much higher in the younger cohorts (relative to owning)—and with higher incidences of people living at home with their parents when they are under the
age of 30 than when they are over 30—may explain the seeming imperviousness of the for-sale housing market to the effects of the Great Suppression to this point in time. On the f lip side, there is considerable evidence that the region’s rental market is being punctuated by an increase in listings due in part to many tenants having doubled- up or moved back home with their parents as they ride out the effects of the recession. All of this is to say that as new rental home completions in the first eight months of 2020 virtually mirror the number from the same period of 2019 (approximately 3,500 rental completions), and as the high number of starts from 2019 become completions in 2020 and 2021, the region may finally see its rental housing vacancy rate rise to a more tenable and reasonable level. This will benefit tenants and undoubtedly present challenges for some landlords.
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