In Metro Vancouver, renters continue to face a daunting landscape marked by soaring prices and one of the lowest vacancy rates in the nation, according to a recent report by the Canada Mortgage and Housing Corp. (CMHC). The report highlights that the region’s vacancy rates remained stagnant at 0.9 percent in 2023, mirroring the figures from the previous year.
One notable change noted in the report is the decline in the average turnover rate for all types of bedrooms, dropping from 10.7 percent in the previous year to 8.1 percent in 2023. The turnover rate reflects the number of rental units that saw new tenants move in during the 12-month survey period.
Braden Batch, a senior economist at CMHC, expressed, “I would say Vancouver’s rental market is probably the toughest market in the country.” He emphasized that the market heavily relies on tenants breaking their leases, seeking better accommodations, and contributing to a more dynamic market. The decreased turnover rate signifies a stagnant market where people are reluctant to move, causing a ripple effect across the rental landscape.
The report also highlighted that the average rent for a two-bedroom unit in purpose-built rental buildings surged by 8.6 percent to reach $2,181, while the same type of unit in standard condo buildings saw an average rent of $2,580 in 2023.
Several factors contribute to this challenging rental environment, including a substantial population influx due to immigration and rising mortgage rates, which have deterred potential first-time homebuyers. The combination of these factors has led CMHC to designate Metro Vancouver as the “tightest major market” in Canada.
Furthermore, home sales in the region lagged significantly behind the 10-year average, registering a 23.4 percent decline, according to the Real Estate Board of Greater Vancouver.
While the CMHC lacks data on population growth for the latter half of 2023, the report revealed a remarkable 56 percent increase in international migration to the province during the first half of the year compared to the same period in 2022.
The report did acknowledge a slight increase in purpose-built rental supply, with a growth of 2.7 percent or 3,144 units throughout 2023. Notably, most of this increase stemmed from one-bedroom units in new developments across Vancouver and Surrey.
Looking ahead, the report anticipates that areas such as southeast Vancouver, the Tri-Cities, and Surrey will experience the most significant growth in rental supply in the near future. However, the challenges persist for renters in Metro Vancouver, making it a formidable rental market in Canada.