Rental vacancies up in Vancouver says CMHC, as pandemic drives down demand
But affordability still a problem for many according to 2020 market rental report
There were more places available to rent in Vancouver in 2020 — if you could afford them.
The Canada Mortgage and Housing Corporation rental market report was issued Thursday, showing that while rental vacancies increased, the cost of those units is still high when compared to the rest of Canada and when taking into account household earnings.
The report, published annually, says the purpose-built rental apartment vacancy rate in the Vancouver metropolitan area increased from 1.1 per cent in 2019 to 2.6 per cent in 2020 due to higher supply and lower demand linked to the COVID-19 pandemic.
After six consecutive years with vacancy rates close to one per cent, it is the biggest increase in the region since 1999.
This recent increase, however, is to some degree due to economic hardship and people leaving the city for more affordable living elsewhere.
"The uneven economic impacts of the pandemic economically have, unfortunately, largely hit rental households the most," said CMHC analyst Eric Bond.
According to the report, the pandemic lowered rental demand in Vancouver last year for a number of reasons, including employment losses, reduced migration and because many university students are studying online and did not need to find housing in the city.
But this did not result in cheaper rents for new prospective tenants.
While rent increases did go up by only two per cent for people already in a unit, compared to 4.7 per cent in 2019, reduced demand did not reduce costs for new renters.
Vancouver is still the reigning champ for expensive rent among Canadian cities. The average cost of a two-bedroom unit increased 2.7 per cent in 2020 to $1,792 per month — the highest in the country — followed by Toronto and Ottawa at $1,653 and $1,517 respectively.
And report data also shows the average asking rent for vacant units was 21.4 per cent higher than already occupied units. This means the average two-bedroom rent for new renters was $2,554.
The report determined only two per cent of apartments in Metro Vancouver could be afforded by households that earn less than $25,000 a year and less than one-quarter of the stock is affordable for households earning under $47,000.
This affordability barrier could also be linked to an increase in interest in rentals in outlying suburban markets, such as Abbotsford and Mission, where CMHC noted vacancy rates decreased in 2020.
"There has been a stronger demand for more affordable units," said Bond, adding the trend is consistent with other Canadian cities, such as Montreal and Toronto, where rental demand has risen in more affordable areas outside of urban centres.
The need for an affordable unit is an acute reality for Stefanie Colliar, who currently lives with her husband and their toddler daughter at her inlaws home in Abbotsford.
Colliar said prior to the pandemic, the couple lived in a one bedroom condo in White Rock and paid about $1,450 a month after living there for six years. They were actually looking for a bigger place before COVID-19 and discovered they could not afford anything in Vancouver or outlying municipalities.
"We couldn't even afford a different place in the size we had," said Colliar.
Then Colliar's husband, who works as a travel agent, lost his job during the pandemic and after tapping their savings, they knew they had to move — this time to pay less, not for more space.
"It was quite disheartening," she said.
She said for the time being, the family has given up looking because they can't find anything anywhere they can afford.
Victoria vacancy rates
On the other side of the Salish Sea, Victoria renters also saw an increase in the overall vacancy rate by 2.2 per cent and an average rent increase of 3.3 per cent.
It is the first time in the capital city since 2013 that vacancies have risen above two per cent.
The average rent for a two-bedroom unit in the capital city for 2020 was $1,507, putting it in the top five most expensive Canadian cities.
Nationally, rental prices crept up. The average two-bedroom rent across cities with more than 10,000 people rose 3.6 per cent to $1,165.
- Tap here to read the complete CMHC rental market report
With files from Steve Chong, Jon Hernandez and The Canadian Press