Vancouver’s sky-high rental prices appear to have stopped increasing. Data from one analyst even suggests the price of units have dropped.
Blogger and data scientist Louie Dinh compared the prices of more than 5,700 Craigslist rental listings in March of this year with those in 2018.
He found the median price of one-bedroom units fell 3.8 per cent and two-bedrooms by 3.5 per cent, which in the three years he’s tracked Vancouver’s rental prices, he says, is “unusual.”
“You typically expect prices to go up just a little bit each year because of inflation and tenant turnover,” he said.
Dinh says when you factor in the cost of inflation, which is typically around two per cent, the drop is closer to five per cent making it even more significant.
To him, it’s an indication the overall market is slowing.
“Holistically, I guess it feels like things are starting to move in the right direction.”
Not a trend, yet
Dinh says he’s seen a continuous sharp upwards climb in rents since 2016.
But the downturn started September of 2018, he says, when he found the median price of a one-bedroom unit inch lower from $1,950. It is now $1,900.
However, he won’t call the slow down a trend yet.
Neither will UBC business and real estate professor Tom Davidoff.
He agrees that rents were previously going up but says the data is still mixed as to whether rents are actually decreasing.
“What I can say with some confidence is between 2016 and 2018 rents rose sharply,” said Davidoff. “There is less evidence of rising rents since then.”
He points out the surge in new rental housing that is slowly being completed could eventually lead to more supply than demand for once.
But, it’s still not enough for him to make a prediction yet as to whether rents will decline.
Vacancy rate to rise
Eric Bond, an analyst with the Canada Mortgage and Housing Corporation, is forecasting those new units will lower Vancouver’s historically high vacancy rate.
He says he expects the rate to rise from 1 to 1.1 per cent later this year.
By 2020, he believes it will increase to 1.3 per cent.
It will mean tenants will have more choices, but he notes prices will may still remain high because new units will be replacing cheaper, older ones.
“Regardless, the market is expected to still remain tight,” said Bond.
“But it does represent a slight easing of the market compared with what we’ve seen over the past five years.”