City of Vancouver’s vacancy rate increases for first time since 2016. From 0.8% in 2018 to 1.0% in 2019.
The 2019 CMHC Rental Market Report for Metro Vancouver was released today. Highly anticipated by politicians, planners, lenders, property managers, investors, developers, appraisers, building owners and realtors, the report is statistical in nature and focuses on the current state of the rental apartment market by area in the region.
We remain mystified at how this release arrived 5 weeks later than usual! But putting aside our dissatisfaction with the delay, here are the main takeaways as seen by Goodman Commercial:
- City of Vancouver’s vacancy rate increased for the first time since 2016. From 0.8% in 2018 to 1.0% in 2019.
- Vancouver CMA also increased marginally from 1.0 to 1.1%.
- Largest vacancy rate increases were experienced in Mount Pleasant, Southeast Vancouver, North Burnaby, Richmond, White Rock, West Van, Langley and Tri-Cities.
- Unfortunately, options are still limited for tenants—areas still facing declining vacancy rates:
- Westside/Kerrisdale (from 1.5% in 2018 to 1.1% in 2019).
- English Bay (from 1.1% in 2018 to 0.7% in 2019).
- Kitsilano/Point Grey (from 0.8% in 2018 to 0.6% in 2019).
- Metrotown (from 3.2% in 2018 to 1.4% in 2019).
- New Westminster (from 1.6% in 2018 to 1.2% in 2019).
- City of North Van (from 0.8% in 2018 to 0.5% in 2019).
- District of North Van (from 1.7% in 2018 to 1.2% in 2019).
- Richmond (from 0.7% in 2018 to 0.5% in 2019).
- Delta (from 1.3% in 2018 to 1.1% in 2019).
New rental supply is working!
Most areas with influxes of new purpose-built rental buildings saw a vacancy rate actually increase. Imagine that!
- Southeast Vancouver – increase of almost 20% of rental stock. 125% increase in 3-bedroom units.
- East Hastings – increase of almost 3% of rental stock. 18% increase in 3-bedroom units.
- City of North Vancouver – increase of 0.6% of rental stock. Over 6% increase in 3-bedroom units.
- New Westminster – 4% increase in rental stock. 12% increase in bachelor suites and over 6% increase in 3-bedroom units.
- Langley – increase of almost 17% of rental stock. Largest increases in 1 and 2 bedroom units (21.6% and 15% respectively).
- Maple Ridge / Pitt Meadows – increase of 3.4% in rental stock. 16.7% increase in 3-bedroom units.
- Tri-Cities – increase of 1.8% of rental stock. Largest increase in 2 bedroom units at almost 9%.
Looks like we will need to wait for next year’s stats to see the true impact of the large amount of new supply coming to the West End (5 high-rise purpose-built rental towers within a few block radius will complete in 2020). We forecast a change in vacancy rates within this neighbourhood but will await 2020’s report to verify it.
Rental rates continue to rise
- Rental rates for every suite type and in every area of Metro Vancouver increased. Only exceptions were bachelor suites in both Richmond and Mount Pleasant. Overall average rent increased 4.7% over the past year, which was more than the provincially-allowable increase of 2.5% in 2019.
- Average rental rate increases range from 0.53% (bachelor suites in North Burnaby) to 54% (3-bedroom suites in Southeast Vancouver).
The highest increases (%) came in these areas:
- Marpole – 13% average rent increase overall
- Southeast Vancouver – 15.2% average rent increase overall
- Langley – 13.9% average increase overall
If you’d like to understand how this report impacts your investment strategy for 2020, please feel free to call Cynthia Jagger (604-912-9018) or Mark Goodman (604-714-4790). We’d be pleased to discuss!
Also, stay tuned for our Goodman Report 2019 Year End Newsletter — this will be released at the end of the month and break down all of the sales in Metro Vancouver for 2019 along with some articles and the quintessential “hot or not” list. A must read!