CHANGING RENTAL HOUSING DYNAMICS & THE PANDEMIC
of 341,000 for the year and the fewest since 1998. This had a significant impact on Canada’s population growth rate, with 2020’s 0.4% increase the lowest since 1916. British Columbia also grew by 0.4% in 2020—its slowest rate of growth since 1874. The 22,755 immigrants who came to Metro Vancouver in 2020 was the lowest count since 1989; in turn, less migration and slower population growth at the regional level has had two distinct impacts on the housing market. One, it reduced the demand for net additional homes in 2020, including both rental and ownership, below what would have transpired had there been no pandemic; in the simplest terms, less population growth meant less growth in the demand for housing. Second, and more specifically, the decline in immigration has likely had a more-than-proportional impact on the rental segment of the housing market due to both the unique age profile of immigrants and their propensity to rent (versus to own) their home. Over the past five years, the typical immigrant to Metro Vancouver has been 27 years old, with 57% of immigrants being between the ages of 25 and 44. This is significant because it is these relatively younger age groups that are most closely associated with rental housing occupancy. According to the most recent (2016) Census, the highest household formation rates for rental housing in Metro Vancouver are in the 25 to 44 year old age group: for this segment of the region’s population, between 20 and 25% of people head a household in a rental unit; this compares to between 12% and 18% for the 45-plus population. Additionally, the 2016 Census shows that compared to the 36% of households in Metro Vancouver that rent, 66% of external migrant households (including immigrants, non-permanent residents, and returning Canadians) are in rental homes up to five years after having moved to Canada. Data on the number of people with study permits in British Columbia also show that there was a net loss of 25,505 international students provincially in 2020 (Figure 3). This was the first year-over-year decline in at least 20 years, and was equivalent to the cumulative net growth in international students seen in the years spanning 2000/01 to 2008/09. As these students would typically be relatively young, this outflow would have an out-sized negative effect on rental housing demand than on ownership demand.
FIGURE 3: STUDY PERMITS, BRITISH COLUMBIA
20,000
15,000
10,000
5,000
0
-5,000
2019/20 net drop in international students in BC equal to all net growth between 2000/01-2008/09
-10,000
-15,000
-20,000
-25,000
-25,505
-30,000
With all of this being considered, and for a given supply of rental housing, then—and all else being equal—this would tend to amplify the increasing vacancy rate and slow rent growth. (As an aside, and as noted below, the supply of rental housing did in fact expand in 2020.) Again, the demographic slowdown experienced in 2020 is expected to be transitory, with the federal government having raised its immigration targets past 400,000 for each of the next three years, in part to make up for the demographic gap that was created by the pandemic in 2020. While we know from the 2016 Census that 58% of people in British Columbia aged 20-24 live at home with their parents (as well as 27% of 25-29 year olds, and 11% of 30-39 year olds), we do not know how that share may have changed as a result of the pandemic; in other words, there are currently no data on this front that would support or refute the anecdotes about young renters moving back in with their parents, or doubling and tripling up as a result of the pandemic and the strain on finances it has caused. It remains to be seen if the 2021 Census data, which are being collected in May 2021 and will be released mid-2022, will shed any light on this dynamic. Finally, it is important to note that domestic migration to British Columbia also has an impact on the rental market, especially considering the province had a net inflow of 4,878 people in Q4 2020 (one of only three provinces or territories to see a domestic migration net inflow to round out 2020). This being said, domestic migration data are not available at the regional level for the full-year 2020, and so have not been considered herein.
APR I L 202 1 — P A G E 7
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