Vancouver is well known for its high cost of living. Recently the economy has taken a downturn and the housing boom has slowed. I am not sure how this will effect renters but I will explore this.
Vancouver’s vacancy rates have increased slightly. For the first time since 2005, vacancy rates are predicted to reach 1 per cent. The Vancouver Sun spoke to David Goodman of Macdonald Commercial Real Estate Services. Goodman believes this trend has something to do with renters moving out.
If there are less tenants to fill the same number of units, then tenants are potentially in a better bargaining position: landlords will need to compete for their business. As more units become available landlords may decrease rent in hopes of attracting new tenants.
On the other hand, if a landlord owns multiple properties their remaining tenants could see a raise in their rent. Landlords may be scrambling to recover some of costs of the vacant properties. It could also mean that fewer people are interested in being landlords. Rental properties may be sold adding another variable into the mix.
As vacancy rates increase in Greater Vancouver, the number of houses sold is dropping. MLS reported a 53 per cent decrease in the number of residential units sold when they compared December 2007 figures to December 2008. A drop in properties sold could be reflective of either a drop in the number of properties for sale or those being bought.
The decline in home sales could spur homeowners to rent their properties, introducing new rental properties to the market. By renting their properties, owners unable to sell might still be able to recover some of the cost of owning and maintaining a property. For renters, this is a hopeful prospect. Economics dictates that as the supply of rental properties increases, rents should fall.
Renters who see no change may want to consider some options. This may be a good time for renters to become owners. The cost of homes is decreasing. A monthly mortgage payments might now seem like a better investment than a monthly rent payment.