DAN TOULEGOET (WESTERN INVESTOR) - Vancouver has been ranked Canada’s #1 market for real estate investment in 2020, in the annual PwC Canada Emerging Trends in Real Estate report, released this week.
In the “Markets to Watch in 2020” section, the report authors said that “despite some headwinds, Vancouver re-emerged at the top of our survey this year for overall real estate prospects.”
The report observed that Vancouver’s office and industrial sectors were both doing “particularly well” with very low vacancy rates and robust development.
It continued, “Looking at the housing market, the long-term trends remain favourable. Recent softness is largely a reflection of a correction from an overheated environment and policies that have caused investors, whether foreign or domestic buyers, to exit the market.”
PwC’s report added, “The [Vancouver housing] market rise was too strong, and now it is reacting to that. However, by the time it is done, it will be in line with where a steady increase should have gotten us over the years… With a strong economy and population growth, Vancouver remains a desirable place to live that will eventually draw buyers back into the market. The question isn’t if, but when, they’ll come back.”
Toronto was ranked in the #2 spot, followed by Ottawa, Halifax and Montreal rounding out the top 5.
Of the Western Canadian and Prairie cities, Saskatoon came in sixth place, Edmonton eighth, Winnipeg ninth and Calgary 10th. The other Canadian city to make PwC’s top 10 was Quebec City in seventh spot.
Click here to see the online version and download the full report.
GLEN KORSTROM (BUSINESS IN VANCOUVER) - The City of Vancouver is touting its enforcement for helping its year-old short-term rental program run effectively.
While the city believes that 73%, or 4,266 of the 5,866 active short-term rental hosts are abiding by the rules, its staff has flagged 27% of all short-term rental addresses for audits to confirm compliance with city regulations that went into effect on September 1, 2018.
Those new rules made it legal for residents to rent their primary residences for stays that were less than 30 days – something that was technically illegal before but was a law that was rampantly flouted with no enforcement.
Renting non-primary residences remains illegal, and Business in Vancouver has documented in past stories how there are workarounds that enabled hosts to skirt the city’s licensing requirements.
The intent of the city’s new rules were to protect rental stock and eliminate unfair competition for bed-and-breakfast businesses.
There were some irregularities with the city’s statistics.
It was not immediately clear, for example, how the city could have listings at 4,366 addresses that staff believe to be in compliance if the city has only issued 4,025 short-term business licences. That would logically mean that 341 hosts have more than one primary residence, which would not be allowed.
Regardless, city data released September 5 showed that city staff has issued:
“The audit program has also resulted in a tenfold increase in licence suspensions and voluntary licence cancellations since the spring,” the city said in a news release.
“Short-term rental licenses are suspended as result of operators not meeting principal-residence requirements, failing to have strata or landlord permission to operate, operating illegal, unsafe or nuisance dwellings or failing to provide the requested documentation.”
The city said that it continues to escalate legal action against commercial operators who are violating regulations.
In August, a commercial operator who had a combined 35 short-term rental listings at two properties, and who was previously fined $20,000 in provincial court, was fined two additional charges of $10,000 by the courts for unauthorized short-term rental activity at their second property. Total fines issued against this operator are $40,000.
Two other commercial operators have been found guilty in BC Provincial Court for operating and marketing without a business licence.
“Since day one, the goals of our short-term rental regulations have been to protect long term rental housing, ensure public safety and bring operators into compliance with our bylaws,” said the city’s chief licence inspector, Kathryn Holm.
“This is a dynamic market with operators and listings continually shifting. Our approach over the last year, and in particular the adaptations we’ve made in the last five months, reinforce that our efforts are working and will continue to evolve as we go forward.”
Holm and her team plan to bring a review of the short-term rentals program to council this fall.
ELANA SHEPERT (VANCOUVER IS AWESOME) - Rentals.ca has released its National Rent Rankings report for August, and Vancouver was ranked the most unaffordable city again.
The average monthly rent for a two-bedroom apartment in Vancouver costs a staggering $3,049, while a one-bedroom costs a steep $2,208. In May, the average two-bedroom cost $2,915.
Vancouver also had the second-highest average rent per square foot for condo and apartment rentals in July at $3.40, with a unit size of 746 square feet. Toronto had the highest rents at $3.60 per square feet, with an average unit size of 750 square feet.
One of the projects with the highest rents on Rentals.ca in Vancouver is downtown at 1295 Richards St. at $4.69 per square feet.
The report also notes that, “affordability for low-income renters is getting worse, as 10th percentile rent inflation is very high.”
With this in mind, the average property listed on Rentals.ca across Canada in July was offered for rent for $1,928 per month, which was a decrease of 1.3 per cent month over month. However, the properties listed in Vancouver saw an increase of nine per cent over last month.
“As expected, changes to the mortgage stress test last year pushed everyone down a rung on the property ladder, resulting in the highest rent growth occurring at the 10th percentile,” said Ben Myers, president of Bullpen Research & Consulting.
“This means the people who can least afford an increase in their monthly housing costs are the ones being subjected to the highest rent inflation.”
Ontario had the highest rental rates on a provincial level. British Columbia was third, with an average asking rent of $1,889 per month. This figure represents an increase of two per cent month over month, following June’s three per cent monthly increase.
Updates on Real Estate news happening in your city.