“Overall the region continues to face a shortage of rental housing options suitable for households with different incomes.”PHOTO BY RICHARD BUCHAN/THE CANADIAN PRESS
Metro Vancouver has a “moderate” degree of vulnerability in its housing market largely because of too many new rental units sitting empty, said the Canadian Mortgage and Housing Corp. in a report Thursday.
It singled out excess inventory in new rental apartments, which has been hit hard by a drop in immigration and the number of international students, and loss of renters working in the service industry who may have lost their jobs due to the pandemic.
The excess inventory can be seen in the higher vacancy rate for newly completed apartments “that are asking for rents that are more than what is demanded by the market in these times,” said Eric Bond, senior specialist at CMHC. “Operators of those buildings might see some financial head winds in the short term.”
But this excess inventory is specifically in newly completed rental units, he noted, and does not reflect the broader rental market.
“Overall the region continues to face a shortage of rental housing options suitable for households with different incomes,” said Bond. “In the medium to long-term, new supply will be crucial to increasing housing access in the future.”
The report found that housing sales saw an “elevated level of activity” in late 2020 and into 2021, while new listings were falling in submarkets, increasing competition for scarcer homes. MLS prices increased 12 per cent year over year, it said, a pace not seen since 2017.
Sales rose faster than new listings in most areas in Metro Vancouver, showing a shift toward a seller’s market compared to a year ago, said the report.
It said overheating — where demand outpaces supply in the housing market consistently — is not currently a concern, but Bond noted this report is backwards-looking, analyzing data from the first quarter of 2021 and the last quarter of 2020.
Recent stories of homes selling quickly or selling significantly higher than asking prices may be an indication the trend will continue its uptick. “The market is quite active for buyers and sellers re-entering the market after taking a pause last year,” he said.