We've all heard Vancouver house prices described as "bubbly" – but are rents about to do the same thing?
Rental prices are expected to go up by an average of 7 per cent in 2018, despite the provincial rent control caps now in force, according to a Rentals.ca forecast issued January 21.
That’s the third-steepest predicted rise in the country, after Toronto (where rents are forecast to increase 11 per cent) and Ottawa (9 per cent), said the national report.
Local housing experts interviewed by the rental website for its annual forecast said that it’s going to become increasingly difficult to find an affordable rental apartment in Vancouver. This is despite new measures that tie the annual rental increase for a sitting tenant to inflation, which is 2.5 per cent in 2019.
“The dynamic is shifting away from ‘bubbly’ house prices to ‘bubbly’ rental rates,” wrote report author Ben Myers, president of Bullpen Research & Consulting Inc..
“With expanded rent control implemented in 2017, tenants are incentivized to stay in their current home. This is not ideal, as some people may choose not to take a job in another part of the city because of higher rents. As fewer units are turned over, there is less supply, and rental rates [on any newly advertised units] increase further.”
Councillor Colleen Hardwick told the rental listing website that Vancouver’s ultra-tight rental market is having a serious social impact. “Seniors are being forced out of their homes. There are rental evictions; aggressive buyouts.” She said that rising interest rates, housing price stabilization, flipping properties, and newer rentals replacing older buildings are the key issues to watch in 2019.
Jean Swanson, City of Vancouver councillor, said she is also worried about affordability. “The issue is scarcity; the vacancy rate is low,” she said. “Owners are buying out buildings at inflated prices, and without vacancy control they are buying out the tenants… the older the building, the more vulnerable the tenants.“
Swanson believes that vacancy control, which would prevent landlords from raising rents between tenants, along with a rent freeze that would prevent yearly increases, would solve the problem.
The idea of vacancy control has seen a major backlash from the development community. The Urban Development Institute has claimed it would be the “death knell” of purpose-built rental supply and would do more harm than good.
B.C.’s Rental Housing Task Force seemed to agree, rejecting vacancy control as one of its 28 recent recommendations in the overhaul of the Residential Tenancy Act.