Vacancy rates in B.C. are climbing and rental price increases are abating following years of record inclines, according to the Canadian Mortgage and Housing Corporation’s 2024 fall report.
But, despite the slowdown in rent growth, renter affordability remained “strained,” the national housing agency said Tuesday.
A two-bedroom purpose-built unit costs $2,314 in Vancouver and $1,993 in Victoria — much higher than the $1,447 national average. Secondary market two-bedroom condos cost $2,827 in Vancouver, on average, far greater than the $2,199 national average.
Average monthly rental costs in Vancouver for a two-bedroom purpose-built unit rose 5.5 per cent, just a hair above the national average of 5.4 per cent while in Victoria they rose at a much slower pace of 3.6 per cent, CMHC reported Dec. 17.
However, when a unit turned over to a new tenant, rent growth was 23.5 per cent in 2024, unchanged from 2023. Such rent hikes upon unit turnover accounted for more than 40 per cent of the overall rent increase.
The province’s private rental vacancy rate rose to 1.9 per cent in October 2024 up from 1.2 per cent a year ago. Vancouver’s vacancy rate is 1.6 per cent while Victoria sits at 2.6 per cent.
One of the greatest increases to the private vacancy rate occurred in Kelowna where it shot up to 3.8 per cent from 1.3 per cent last year. The average rent price in Kelowna last October was $1,916 for a two-bedroom purpose-built rental unit.
Higher vacancy indicates “waning demand,” the agency hinted as “local market intelligence indicates that most rent increases took place at the end of 2023 while asking rents fell in recent months.”
The figures reflect how overall, across Canada, rental costs are abating from the record paces in the previous two years due to multiple factors such as higher unemployment, including among youth, more purpose-built rentals being constructed and lower demand from immigration levels being curtailed from record highs.
“Some young people will find it more difficult to move out on their own and this will reduce rental demand,” the agency stated.
Still, CMHC cautions that “the increase in rental stock was driven by newly completed, higher-priced units, which were unaffordable for many renters and primarily served higher-income households.”
The agency also noted that rental stock growth is occurring mostly in the suburbs of Vancouver.
“The purpose-built rental apartment universe expanded at a slower pace in 2024 than in the previous two years. Despite that, this year's growth remains significant compared to average growth in the past decade. Unlike recent years, most of this growth took place outside of the City of Vancouver. Areas like North Vancouver, Surrey and the Tri-Cities saw relatively more units added to their rental stock. These areas are attractive for developers as they're likely to have cheaper land for new development compared to the City of Vancouver.”
