housing
EXAMINING THE DEMAND SIDE OF THE LEDGER Forgive us if we’re stating the obvious here, but there is a strong correlation, and likely causation, between population growth and rental rate growth. It makes sense, as the population grows there is more demand for homes, and newcomers to an area are most likely to rent when they first arrive so there is increased competition for rental homes in particular. Additionally, supply responses in housing are quite slow, it takes a long time to build a home, whereas population growth can accelerate much more quickly (as we’ve seen with record setting growth in both 2022 and 2023).
We can observe this trend here in Metro Vancouver, especially lately, where big increases in population in each of the last two years at 3.0% in 2022 and 3.1% in 2023 corresponded to average rents increasing by 8.3% and 9.1% respectively. With that in mind, and with the massive population growth expected over the next two decades we detailed earlier, it’s critical that we increase the rental housing supply over- and-above what we’re already building sooner rather than later.
OF GROWING POPULATIONS AND RENT ACCUMULATIONS
10.0%
3.5%
9.1%
9.0%
3.0%
3.1%
8.0%
2.5%
7.0%
6.0%
2.0%
5.0%
1.5%
4.0%
3.0%
1.0%
2.0%
0.5%
1.0%
0.0%
0.0%
ANNUAL POPULATION GROWTH LEFT AXIS
ANNUAL RENT GROWTH RIGHT AXIS
DATA: YEAR-OVER-YEAR CHANGE IN POPULATION & AVERAGE PURPOSE BUILT APARTMENT RENTAL RATES, METRO VANCOUVER
SOURCE: CMHC & BC STATS
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