The six-storey wood frame Radius apartment complex under construction in Royal Oak promises to further increase the supply of affordable housing. (Travis Paterson/News Staff)

Rental vacancies are rising across Greater Victoria, but so are rents

Saanich records a rental vacancy rate of one per cent — up from 0.7 per cent

First, the good news. Rental vacancies in Greater Victoria are rising. But here is the bad news — so are rents.

Those are the findings of the 2018 Canada Mortgage and Housing Corporation (CMHC) Rental Market Survey (RMS) for Metro Victoria.

The report finds that the 2018 vacancy rate for Greater Victoria stood at 1.2 per cent in October, up from 0.7 per cent in October 2017. But the increase in available units did not impact their rent. Despite the rising vacancy rate, rents rose to $1,406 in October compared to $1,288 in October 2017 — an increase of 7.5 per cent on top of the 7.7 per cent increase in 2017 – the largest increase since 1991.

Senior analyst Braden Batch said the rent increase, while counter-intuitive, could have been higher, had it not been for various forms of rent control.

In assessing the state of the rental market, economists look to the inflation rate, which stood at 2.4 per cent in October — well below the regional rent increases.

RELATED: Students struggling with Greater Victoria’s tight housing market

“That means you have a tight rental market,” he said. No natural vacancy rate exists, said Batch, who expects that the vacancy rate will hit 1.5 per cent in 2019, as new units continue come online. But so will rents, he adds.

The report notes that the region has experienced a multi-year shift in housing demand from home ownership towards rental.

“During this time, the purpose-built rental universe has been slow to respond, leading to several years of under-supply relative to demand, and a low vacancy rate as a consequence,” it reads. “Starting in 2015, however, purpose-built rental starts rose to the equivalent to a [three per cent] share of the existing purpose-built universe, and have since risen to [six per cent] in 2017, and another [six per cent up] to October 2018.”

Batch said this increase in the supply of rental housing has been able to absorb — at least partially — the rising demand for rental housing — hence the rise in the vacancy rate. But he also cautions that the rise in vacancies reflects growing supply on the higher end of the rent range.

Overall, the region has 25,537 rental units, with 17,182 — more than 67 per cent of the total — located in the City of Victoria. It is also the municipality with the lowest regional vacancy rate. Its James Bay neighbourhood recorded a vacancy rate of 0.5 per cent. Victoria’s Cook Street and Fort Street areas recorded vacancy rates of 0.9 and 1.1. per cent each. The rest of the municipality recorded a rate of 1.7 per cent for a total of 1.1 per cent. This said, Victoria also recorded the largest increase in the rental supply, with the largest concentration in the area that includes downtown Victoria.

RELATED: Shelter me: Rental housing crunch plaguing Vancouver Island

Saanich — the region’s largest municipality — recorded a vacancy rate of one per cent — up from 0.7 per cent. (The report lumps together Saanich with Central Saanich and finds that the overall supply of rental housing has gone up by 22 units to 3,122).

Coun. Judy Brownoff said Saanich’s higher vacancy rate and rental stock represents good news for renters, because it means more selection.

Citing a number of upcoming development, Brownoff expects vacancies to increase. “Municipalities now have ability to look at sites for pre-zoning for rentals,” she said. “Saanich planning is looking at that.”

Coun. Zac de Vries offers a more cautious interpretation. “Vacancy is not up very significantly and has actually decreased for some housing types (like bachelors),” he said. “Rents are up, but they are slowing down. There’s work to be done to get Saanich towards a healthy vacancy rate of about four per cent. Supply is needed to address demand while raising the vacancy rate.”

Oak Bay recorded the highest vacancy rate with 2.2 per cent with the provision that Oak Bay has a small stock of rental units (1,046) on the pricier side, said Batch.

The West Shore communities, meanwhile, recorded a drop in vacancies to 0.7 per cent from 1.3 per cent despite the largest proportional increase in the rental housing supply.

Sidney, which recorded a vacancy rate of zero in October 2017, ticked up to 0.8 per cent.

Provincially, the vacancy rate remained low despite a slight increase to 1.4 per cent, compared to 1.3 per cent in 2017. Nationally, the demand for rental housing grew more than supply, with the national vacancy rate dipping to 2.4 per cent from three per cent.


Like us on Facebook and follow us on Twitter

wolfgang.depner@saanichnews.com

Just Posted

Victoria resident faces discrimination from BC Transit since transitioning to a wheelchair

Daniel Sands says they are often not allowed on buses, even when there is room

Canada Post carrier seriously injured in Saanich dog attack

The employee was bitten on the hand and arm

North Saanich woman arrested after police pursuit, alleged abduction at elementary school

Two police officers were injured and one police vehicle damaged

Single dad reaches out to Greater Victoria community to help kids celebrate Christmas

A young family was overwhelmed with the warm response from strangers

VIDEO: More air-passenger rights go into effect this weekend

The first set of passenger rights arrived in mid-July in Canada

Swoop airlines adds three destinations in 2020 – Victoria, Kamloops, San Diego

Low-fair subsidiary of WestJet Airlines brings new destinations in April 2020

POLL: Do you have a real or artificial Christmas tree?

The lights are up, holiday shoppers are bustling through the streets and… Continue reading

Navigating ‘fever phobia’: B.C. doctor gives tips on when a sick kid should get to the ER

Any temperature above 38 C is considered a fever, but not all cases warrant a trip to the hospital

Transportation Safety Board finishes work at B.C. plane crash site, investigation continues

Transport Canada provides information bulletin, family of victim releases statement

Wagon wheels can now be any size! B.C. community scraps 52 obsolete bylaws

They include an old bylaw regulating public morals

Suspect steals 150 pairs of cosmetic contacts from Nanaimo party supply store

Incident happened at Pattie’s Party Palace on Rutherford Road on Thursday

Indigenous mother wins $20,000 racial discrimination case against Vancouver police

Vancouver Police Board ordered to pay $20,000 and create Indigenous-sensitivity training

Greater Victoria wanted list for the week of Dec. 10

Greater Victoria Crime Stoppers is seeking the public’s help in locating the… Continue reading

Most Read