Vancouver’s rental market saw availability hit a two-year low during the third quarter while rental rates reached an all-time high, fuelled by an influx of students returning to the classroom and young professionals migrating to the region from other provinces.
In its Q3-2021 Vancouver Rental Take report that was recently released to email subscribers, Zonda Urban — formerly Urban Analytics — reports that prices for purpose-built rental properties in Metro Vancouver rose dramatically in the last quarter as supply decreased.
Rents rose an average of $0.10 per square foot (PSF) during the third quarter, resulting in an increase of 3.1 per cent, while overall unit availability dipped by 7.8 per cent.
Vancouver West saw the most dramatic increase, surging by $0.50 PSF compared to last quarter due to reduced supply and a project launch in the Fairview neighbourhood. Meanwhile, prices in the Abbotsford sub-market have risen by $0.48 PSF this year, pushing past average values in the Langley and Ridge Meadows sub-markets.
“Availability rates are now at the lowest level in two years as post-secondary institutions have resumed in-person lectures and an influx of students have migrated back to the region,” said the report. “With low levels of availability, leasing teams are continuing to push rental rates where they can and capitalize on the supply crunch.”
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Supply levels remain low in Metro Vancouver, with 20 fewer units released within the first three quarters of 2021 compared to the same time frame last year. Year-to-date released inventory totals also saw a reduction of 250 from 2019.
Only 679 new rental units were released to the market in the third quarter, a 40 per cent drop from the 1,133 units released during the previous quarter. Availability in fully leased buildings saw a one per cent decrease, with 127 fewer units available at the end of the quarter.
Zonda Urban says it considers any rental apartment project in its initial leasing campaign to be actively leasing, while the project is considered fully leased at the campaign’s conclusion and subsequent turnover is monitored monthly.
Looking ahead, several rental developments will aim for record-breaking rent prices in their respective sub-markets during the fourth quarter, particularly in Downtown Vancouver and Surrey.
“It was noted during the third quarter that along with schools, rental developments in urban locations that are close to employment centres have been experiencing higher amounts of interest, as more organizations return to the office,” said the report.
Zonda Urban is tracking 329 proposed purpose-built rental projects that would add a total of 17,733 rental units upon completion. There are currently 13 rental developments expected to be completed within the next six to nine months, encompassing 2,115 units.