Is the pandemic really reducing rents in Metro Vancouver? It's complicated
Reports suggest rents are decreasing, but experts warn it's not clear how that will play out across the region
It's been a long time since Vancouverite Jean-Luc Tourigny has seen rent prices like this.
Tourigny, 51, was inspired to start looking for a one-bedroom apartment of his own when he noticed a lot of "for rent" signs around town. When he started making calls, he was shocked.
"I'm actually finding landlords willing to negotiate," Tourigny said.
When he was looking last year, the cheapest place he could find was $1,600. But in the past couple of months, he has found apartments in the $1,200 range.
Some reports suggest the pandemic has taken a bite out of rental rates in Metro Vancouver — although housing experts advise caution when interpreting that data, and what it actually means for renters across the region.
Nearly 10% drop
According to Rentals.ca, rents in Vancouver have dropped eight per cent compared to this time last year. Rental website PadMapper says rent in Vancouver has dropped by 9.4 per cent in that same time.
The Canadian Mortgage and Housing Corporation's Summer 2020 Housing Market Outlook predicts a sharp rise in vacancies due to several factors.
"There has been a number of developments in the rental market that are going to play out this year due to the pandemic," CMHC housing analyst Eric Bond said in an interview.
Bond says COVID-19's dampening effect on immigration and international students are two of the biggest factors to affect demand for rental housing. Even domestic students, no longer bound to campus because of online classes, may choose to live in cheaper cities, he says.
The pandemic has also hit another source of renters hard, he says: people who work in the service industry, many who may now need to find roommates or move in with parents to save money.
Meanwhile, Bond says, about 9,000 new rental homes are under construction in Metro Vancouver. But Bond also says so far this year there has been a 27 per cent drop in new rental housing starts.
Looking at the long-term
Michelle Farina, managing broker for Advent Real Estate Services, says she has seen a 40 per cent increase in turnover among the 850 properties her company manages in Metro Vancouver.
"I think that people are taking a look at their overhead and their finances, and although they may not be struggling today I think they're looking sort of for the long-term," she said.
Farina says the biggest turnover has been in neighbourhoods around post-secondary institutions. But also, some renters are moving into cheaper places, or choosing to live with friends and family.
So far Farina hasn't seen landlords offer much of a drop in rent — although she says many aren't raising rents when new tenants take over, and a few have even offered first and last month's rent free.
'Hard to figure out all the pieces'
University of British Columbia business professor Tsur Sommerville says people should be careful when interpreting data that suggests prices are dropping.
Sommerville says websites like PadMapper and Rentals.ca don't compare the same units year to year. Also, they only gather data from new listings, which are often more expensive because they're not bound by provincial rent control measures.
"It makes it kind of hard to figure out all the pieces," he said.
Sommerville says it's possible that Airbnb rentals converting to long-term rentals may be contributing to a supply increase, but it's hard to find any data to support that. Renting out a secondary apartment as an Airbnb is illegal in Vancouver and the property owners who do so would be unlikely to get a licence least they draw attention to themselves.
Still, he thinks that likely has some influence on the market.
"There were units that were illegal that were still happening, and all of a sudden that's a market that's really dried up," he said.
Sarah Moores, a renter in Maple Ridge who has been looking for a two- or three-bedroom home in the Fraser Valley for the past three months, says rents in her area certainly don't seem to be dropping.
"This isn't my first time trying to find a rental in B.C. It gets worse every few years," Moores said.
UBC sociology professor Nathanael Lauster says demand for rental homes may have dropped in some areas, but it's still hard to know how that may trickle down to other parts of Metro Vancouver.
Although lower demand does tend to lead to lower rents, Lauster says that may not come into play in markets like the Fraser Valley where there are few rental homes being built and few to begin with.
Lauster says the pandemic has added so many changing variables, it's hard to know how rents will be affected in the long-term.
"We're in a period of really unsettled understanding about what the future of migration is going to look like and the future of where people want to live," he said.