Vacancies: 1.3% ↑
Rents: $1,099 ↑
Vancouver’s Long Term Stable Rental Market Is Attracting Apartment Development
The apartment market in B.C. remains strong. Vacancies are even lower in Vancouver’s core, where a heated housing market is pushing people towards rental living. These vacancies are comparable to those found in the Greater Toronto Area, and the average rents are as much as $50 per month higher.
New apartment construction in Vancouver has lagged in the past decade as the condominium market has heated up, but the extremely low vacancy rates seen throughout the city bodes well for new apartment construction in the near future. Already the city is giving developers bonus densities they build rental properties. There is every indication that rising housing prices are increasing demand for rental apartments, and young urban professionals are being drawn to smaller sized units offering lower rents per unit, but bringing a higher return per square foot to developers. The presence of the University of British Columbia, Simon Fraser University and Capilano University provide a large population of students (over 90,000) that need to be served with student housing.
Vancouver’s location in a river valley surrounded by mountains limits urban sprawl and increases land values, which makes high rise rentals more economical by design. However, Vancouver is supporting intensification with investments in public transit infrastructure. New rental communities have been built up around transportation nodes.
Victoria is the second largest centre for apartments in British Columbia. The city’s population currently stands at 82,000 and has been increasing at a steady rate for the past decade. The city’s status as the capital of British Columbia gives it a strong core of public sector jobs. The city’s three universities with a combined enrollment of 27,000 provide a strong base for student housing.
Although Victoria has seen little in the way of new apartment construction, vacancy rates are low and average rents have been increasing at a steady rate. Clearly, a market exists for new construction, now and into the future.
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BURNS BLOCK ADDS MICRO-LOFT LIVING TO VANCOUVER MARKET
When the City of Vancouver closed the Burns Block building in the downtown eastside in 2006, local activists complained that the city was making the housing crisis worse. The 102-year-old building had been converted to a low-income hotel before it was shut down due to fire code violations.
The property sat vacant for years afterwards before it was acquired by Reliance Properties for conversion to brand-new micro apartments. The 270 sq. ft. apartments will rent for nearly $300 less than an average bachelor suite on Vancouver’s hot apartment market.
The Burns Block is not far from the Woodwards development, which also took an old commercial/industrial building and converted it to loft living.
As Vancouver’s apartment market continues to heat up, more developers will take former industrial properties and completely convert them into new residential space. The process is complicated, with the developer navigating local regulations and more challenging construction techniques, but the old industrial stock is plentiful, and the market is eager to snap up the new units.