BY DERRICK PENNER, VANCOUVER SUN MARCH 29, 2016
The Canada Mortgage and Housing Corp. has embarked on an effort to record the rate at which apartments in Metro Vancouver’s hot rental markets change hands to better understand market dynamics. DARRYL DYCK / THE CANADIAN PRESS
Photograph by: DARRYL DYCK , Vancouver Sun
Results from Canada Mortgage and Housing Corp.’s first-ever rental turnover survey in Metro Vancouver points to a migration of rental demand from the pricier centre to less-expensive suburbs.
The survey, which tracked the number of purpose-built rental suites that changed hands during the 12 months up to the fall of 2015, found that 19 per cent of units had new tenants.
In suburbs outside of the city centre, however, turnover rates were higher, coinciding with a decline in vacancies, said CMHC analyst Richard Sam.
“It’s cheaper to rent outside Vancouver, so it’s possible that people are looking in terms of affordability,” Sam said. “So vacancy (rates) and also turnover, supports a little bit (the notion that) people are moving away from Vancouver to areas in the Fraser Valley.”
Rents, the CMHC data shows, are $395 cheaper, on average, in Surrey compared with the city of Vancouver.
However, Sam cautioned that it is difficult to make direct correlations between factors in the housing market because this was the first time they have collected the data and don’t yet have a sense of how turnover rates may be changing.
Sam said the rental industry asked CMHC to start collecting the data.
The first report seems to back up anecdotal observations of building owners that Metro Vancouver neighbourhoods generally experience between 10 and 30 per cent turnover each year, said Dave Hutniak, CEO of Landlord B.C., the industry association for apartment owners.
“Moving forward, hopefully we’ll build a time series (with the data) to make more conclusions or better assumptions about the rental market,” Sam said.
The University Endowment Lands, on the border of Vancouver near the University of B.C., had the highest turnover rate at 48 per cent, but also had the lowest vacancy at 0.1 per cent.
The lowest turnover rate was eight per cent in southeast Vancouver, a neighbourhood bordered by Boundary Road and Cambie Street, roughly below King Edward Boulevard.
Data on turnover rates is important to building owners, Sam said, because it gives them estimates of what they can expect to absorb in terms of costs associated with apartments changing hands such as repairs, new paint and advertising.
However, turnover data can also be helpful to tenants in pointing to pockets of opportunities, he said.
For instance, potential tenants might be deterred by a very low 0.4-per-cent vacancy rate from searching out rentals in the Mount Pleasant and Renfrew Heights neighbourhood. However, the area showed a 20-per-cent turnover rate in the CMHC survey.
“What it says is that although the market is tight, units do become available,” Sam said. “But because of the tight market, like the housing market, those units are probably going to be snapped up quickly.”