Vancouver area 'rent increase tsunami' predicted by local realtor
A shortage of rental stock and unprecedented demand in the Greater Vancouver area are creating the perfect storm for a "rent increase tsunami," according to a veteran realtor's report.
David Goodman, principal of HQ Commercial, says in the July edition of the Goodman Report that vacancy rates are hovering around 0.5 per cent, and rents are going up by 10 to 20 per cent whenever there is a suite turnover.
"It seems that the already severe [rental] shortages have been worsened or have been exacerbated because of a lack of new supply and again, many people are opting to rent as opposed to buying," he told On the Coast's Stephen Quinn.
"The pot has been boiling for many, many years and I think it's coming to a head right now because of the heightened demand for rentals."
According to Goodman's report, the average rent for a two-bedroom suite in the Vancouver area in April 2015 is around $1,352 — roughly a 5.6 per cent increase from the same time period in 2014.
While there have been some new rental stock in peripheral areas, such as along Kingsway and near SkyTrain stations, Goodman says they're still not enough to address the rental shortfall.
Though he understands the city wants to protect existing, aged rental apartments because it is concerned about displacing vulnerable, low-income tenants, Goodman says "it's basically a five for one replacement if you tear down an old 16-suiter and you replace it with 80 units."
"It's a noble gesture, however, they've basically thrown the baby out with the bath water by not allowing some of these almost derelict buildings to come down to be replaced with higher density rentals and perhaps some market housing," he said.
The Goodman Report forecasts that the rental shortage will only get worse over the next few years, and annual rent increases will far surpass inflation rates.
Correction : An earlier version of this article says the report refers to the City of Vancouver. In fact, it refers to the Vancouver census metropolitan area, which includes many other municipalities.(Jul 29, 2015 1:10 PM)
