RENTAL MARKET UPDATE the rennie brief
WHAT YOU NEED TO KNOW ABOUT METRO VANCOUVER’S RENTAL MARKET • Metro Vancouver continues to have the lowest purpose-built rental vacancy rate among major Canadian markets, at 1.2%. The region’s vacancy rate is now almost on par with its pre-pandemic level (1.1%). • While rental rates were frozen for existing tenants, they increased by 1.9% overall due to both the turnover of units and the addition of new units to the existing stock.
FEBRUARY 2022
The Canada Mortgage and Housing Corporation (CMHC) collects data on Canadian rental housing markets annually each October. The latest data, for 2021, have just been released, providing insights into primary (purpose-built) and secondary (condo) rental market vacancy rates, rents, and dwelling counts. Here we examine how vacancy rates and monthly rents have changed in the past year. METRO VANCOUVER’S RENTAL MARKET IS THE TIGHTEST IN CANADA Prior to the onset of the pandemic, Metro Vancouver had the lowest purpose-built vacancy rate (at 1.1% in October 2019) among major Canadian markets, followed by Toronto (1.5%) and Ottawa (1.7%). Edmonton had the highest pre-pandemic vacancy rate at 4.9%, followed by Calgary at 3.9%. Not surprisingly given the nature of the economic impacts associated with the pandemic, each of the eight markets considered in the chart below saw their purpose-built rental vacancy rate rise in 2020. That said, Metro Vancouver’s vacancy rate remained the lowest (at 2.6%), with Edmonton again featuring the highest (7.2%).
While the overall Canadian average vacancy rate remained steady between 2020 and 2021 (at 3.1%), the regional experience varied. Of the eight markets considered here, five saw their vacancy rates actually increase in 2021, with the remaining three (Metro Vancouver, Calgary, and Quebec City) registered declines, reflecting tightening rental market conditions. VACANCY ALMOST ON PAR WITH PRE-PANDEMIC LEVEL Metro Vancouver’s purpose-built rental vacancy rate fell to 1.2% in 2021, only slightly higher than its pre-pandemic rate of 1.1%, and in line with its pre-pandemic decade average of 1.2%. The return of international students, elevated immigration flows, and robust domestic in-migration each played a role in the market’s tightening. There were broad declines in vacancy across most of Metro Vancouver, with the lowest regional rates observed within the City of Vancouver, led by the 0.0% vacancy rate in the University Endowment Lands and followed closely by South Vancouver, the West End, and the Westside, each with a vacancy rate at or below 0.6%. Surrey’s purpose-built rental market was also particularly resilient in 2021, registering a 0.6% vacancy rate. At the other end of the spectrum, the more suburban markets of Maple Ridge/Pitt Meadows (4.6%) and the Tri-Cities (2.8%) has the highest rates. RENTS CONTINUE TO INCREASE As the vacancy rate in Metro Vancouver fell, the average monthly rent increased by 1.9% between 2020 and 2021, to $1,537. The average rent for studios rose by 3.4% (driven by the chase for affordability), while that of three-bedroom homes rose by 5.4% (driven by the chase for space). With the provincial government having frozen rental rates for non-mover tenants during this period, the increases can be tied to both the turnover of tenants within, and the addition of newer, more expensive rental units to the existing purpose-built stock. THE YEAR AHEAD: 2022 Despite the elevated number of rental housing starts seen over the past few years, vacancy rates in Metro Vancouver are largely back to their pre-pandemic levels. When combined with what is anticipated to be historically-high in-migration to the region going forward, this will almost certainly yield a very tight rental market through the balance of 2022.
PURPOSE-BUILT RENTAL VACANCY RATES, SELECT METROS FRQGLWLRQV YDU\DFURVVWKHFRXQWU\
9DQFRXYHU
7RURQWR
0RQWUHDO
2WWDZD
(GPRQWRQ &DOJDU\
:LQQLSHJ 4XHEHF&LW\
For further information please contact Ryan Berlin (rberlin@rennie.com) or Ryan Wyse (rwyse@rennie.com). The information set out herein (the “Information”) is intended for informational purposes only. RAR & RMS has not verified the information and does not represent, warrant or guarantee the accuracy, correctness and completeness of the information. RAR & RMS does not assume any responsibility or liability of any kind in connection with the information and the recipient’s reliance upon the information. The recipient of the information should take steps as the recipient may deem necessary to verify the information prior to placing any reliance upon the information. The information may change any time without notice or obligation to the recipient from RAR & RMS.
Page 1Made with FlippingBook - professional solution for displaying marketing and sales documents online