A one-bedroom in the Shangri-la for $1,800 a month? Sounded like a good deal to one West End observer. Or more particularly, a downer for landlords in older buildings who were hoping for an upward squeeze in rents.
If Craigs List is another indication (and it certainly is), there are pages and pages of suites on the market. Anecdotal reports suggest that even stated prices are negotiable.
I’d predict that Vancouver will become a renter’s market over the year as more condos come on to the market to be rented out or, less voluntarily, as the result of liquidated investments from speculators.
There was a time in the 1990s when the West End saw a competitive housing market, and even a loss in population, as renters decamped into Downtown South. And that, frankly, was the idea.
When the City approved the rezoning of the area between Burrard and Yaletown in 1991, it was meant in part to take the pressure off the West End, which had been effectively frozen by the rezoning of 1989 and contraints going back to the 1970s. (The West End is a vivid illustration of my maxim that “as the rate of change slows down, people’s perception of change increases.” Attempts to add density, or even change the status of existing buildings, will be meant with significant resistance. Better to accommodate change where growth will be accepted.)
We expected that with the flood of development outside the boundaries of the West End, affordability and stability would be maintained within. And despite what some activists would maintain, it apparently has. New housing, though seen to be expensive, has taken the pressure off the existing stock – a generality can be applied across the region.
Of course that’s small consolation to those whose income has declined. Which is probably another reason why rents will not increase significantly, if not actually decrease. There may even be nostalgia for the boom-boom days when the squeeze in the rental market was a reflection of a burgeoning economy, leveraged as it was on credit and unrealistic expectations of the future.
UPDATE: The Goodman Report, the most authoritative newsletter on sales of apartment buildings in Metro Vancouver, just put out its 2008 Year in Review. On the subject of vacancies, here is its prognostication:
CMHC predicts that “vacancy rates for 2009 will stay below 1%.” We in turn forecast that owners will experience a more challenging rental market due to a lessening of demand. Having been in contact with owners on a continuous basis throughout Greater Vancouver, we have learned that fewer people are responding to “for rent” ads, more tenants are vacating their suites because of financial hardship, and significant numbers of tenants are moving into their recently purchased condos. Finally, expect significant numbers of frustrated investors unable to sell their vacant condos, to “throw in the towel” and tenant their suites.
More optimistically: “Expect a renewed sense of cooperation from all levels of government to help foster the development of rental projects.”
Is a one-bedroom apartment for $1,800 really a good deal in any building? I don’t think a one-bedroom apartment that costs about two thirds of my monthly pay cheque, or an even higher proportion of the average single person’s monthly paycheque, is a great example of a renter’s market.