If you think buying a house in our housing market is hard, try finding a place to rent
Gillian Shaw
Sun
If you think buying a house in our housing market is hard, try finding a place to rent Connor Holloway thought a budget of up to $1,500 a month for a two-bedroom apartment would get him and his roommate a place in Kitsilano — maybe not luxurious, but livable.
Connor Holloway thought a budget of up to $1,500 a month for a two-bedroom apartment would get him and his roommate a place in Kitsilano — maybe not luxurious, but livable.
That dream disappeared about the time he was shown into the so-called second bedroom of a Kits ground-floor suite only to run smack into the furnace and hot water tank. Renting at $1,500 a month, it also came with an entrance shared by the entire family.
But that began to look good compared to the slightly cheaper accommodation nearby, where he had to step over feline feces and regurgitated material of indeterminate origin in the showing.
“Good luck,” said Holloway when asked if he thought it possible to find a two-bedroom suite anywhere close to Kits for $1,000 a month. “That’s hot property.
“We’ve had to extend our pool from Kits to Dunbar, past Oak St. and downtown and we’re still looking.”
If you think buying a house in Vancouver’s overheated housing market is hard, try finding a place to rent.
One thousand dollars a month is the new sweet spot for a one-bedroom suite anywhere west of Main Street in Vancouver and while that will get you a bigger place the farther you go from the city centre, you’ll likely find yourself well into Surrey and beyond if you want a good two-bedroom at that rate.
The market varies, though, with basement rental suites and individual condos not included in the Canada Mortgage and Housing Corporation’s 2005 annual survey, which considers only purpose-built rental units. There are places that come in below the $1,004 pegged by the CMHC as the average for a two-bedroom in Vancouver’s census metropolitan area stretching from West Vancouver to Pitt Meadows.
However, many of the deals never show up in the ads. Great digs tend to be passed tenant to tenant in a kind of underground forum where you have to know someone, or know someone who knows someone.
PROPERTY MANAGER UPSET
So precious is this information that one property manager was quite upset at the prospect that we might publish the fact that he has among other properties, a complex with two-bedroom suites for $900 on Southwest Marine in Vancouver. Nor did he want his name or company name used.
His reticence likely had something to do with the 50 or 60 phone calls he had just fielded for another suite, this one two bedrooms above a restaurant on the sought-after west side of Vancouver, at $950 a month.
Finding tenants isn’t the problem — dealing with the lineups looking for apartments is the more likely scenario.
“There’s a ton of people looking,” said Holloway. “I went to a place on West Fourth and there had to be at least 60 people lined up outside. . . . It was just wild. It wasn’t great, but we didn’t get it anyway.”
For landlords and property agencies, the applications flood in. “Vacancy isn’t our biggest problem these days,” says Judith Harris, general manager for investment properties at Crosby Property Management.
“Basically if you only had $1,000 and you wanted to be downtown or on the west side, you could get a bachelor in an old building and no amenities or a teeny, tiny one bedroom.
“In the nicer buildings, for a two bedroom you’d be paying $1,400 to $1,500 on the west side.”
In trendy Yaletown, Harris said one-bedroom suites of 600 to 700 square feet are listing around $1,100 to $1,200 a month. Close to the University of B.C., expect to pay even more, with one bedrooms starting around $1,300. Outside of the purpose-built apartments, prices can be lower.
“If you wanted to live in a basement, you could have a one bedroom basement in Kits Point for $1,000,” said Harris.
For a two-bedroom suite, Harris had to look further out.
“You could get a two bedroom in Surrey for $1,000,” she said. “For $1,000 you could maybe get a two bedroom in Burnaby but it wouldn’t be all that great.”
In her search, Harris found one bedroom and den suites at 800 square feet in a new building on Kingsway renting for $1,400 to $1,500 a month. For that, you get a kitchen counter that’s an upgrade from the standard Arborite.
The rental rates come as no surprise to David Goodman, a commercial realtor with Macdonald Commercial Real Estate Services and co-author, with son Mark Goodman, of the Goodman Report, an online publication and marketing service that tracks market trends and sales in the Greater Vancouver apartment market. “We do have a serious supply problem in Vancouver and it’s not going to go away,” he said.
The Lower Mainland’s high-priced real estate is reflected in the price and the limited supply of rental accommodation.
With the average price of a new condo in the Greater Vancouver area ranging from $275,000 in east Vancouver to $550,000 on the west side, according to Royal LePage’s latest report, and with land at a premium, creating rental accommodation is too costly for many developers.
Landlords upgrading
And with real estate prices high and Vancouver’s capitalization rate low — a ratio used in determining the value of income-producing properties — Goodman said landlords find they must upgrade older buildings and charge higher rents.
“In order for an owner to pay for the property and then put money into the building, it’s just Economics 101 that they have got to get higher rents,” he said. “No one is building rentals, which is another problem.
“The only new rentals coming on stream are the condos which go into a rental pool.”
Goodman said landlords are constrained by the market in the rents they can ask.
“One shouldn’t be pointing to a landlord if they are trying to achieve market rents,” he said.
“If it is over-market, it will sit empty.
“The market never lies.”
Like the real estate market, in rentals, it’s all about location, location, location.
“You can get from 458 square feet to 1,450 square feet for the same price,” said Debbie Johnson, marketing manager with Gateway Property Management Corp.
Her company manages properties across Canada and fields inquiries from prospective tenants in Canada and worldwide. The requests range from people who are working downtown and want to be able to walk to work, to dog owners seeking pet-friendly buildings, to tenants needing wheelchair-accessible buildings, which can eliminate many of the older walkups.
Demand exceeds supply
Gateway deals only with purpose-built rentals and demand far exceeds supply.
“Our hearts go out to tenants trying to find a place to live,” said Johnson. “It is very stressful for them.”
Her company is about to launch a new real-time service for tenants through its website in which vacancies can be instantly uploaded by apartment managers.
Johnson said condos are in such demand that individual condominium owners in Vancouver will hold open houses for prospective tenants.
“You go down and there will be 15 people waiting to rent the condo,” she said.
Johnson said that with the market determining the rental rates, it’s not about finding a bargain but simply finding an apartment.
“It’s not so much a matter of finding the good deals at a bargain because you are looking at market rents out there,” she said. “When you are looking at areas like the West End and downtown, you pretty much have to pound the pavement and go door to door.
While some apartments maintain waiting lists, Johnson pointed out that often tenants don’t have the luxury of waiting to find accommodation.
Despite vacancy rates that hover at 1.5 per cent for the Vancouver CMA (Census Metropolitan Area), with many of the most popular areas well below that, Vancouver is second place behind Toronto for the average price of a two bedroom apartment.
A two bedroom on average in Toronto will set you back $1,052 a month, compared to Vancouver’s $1,004, according to CMHC’s 2005 rental report. For a real deal, check out the cities with the lowest average rents in Canada — Trois-Rivieres at $474 and Saguenay at $472.
While some tenants might suffer sticker shock at Vancouver rents, Cameron Muir, senior market analyst with the CMHC in Vancouver, said rents tend to rise at the rate of inflation.
“Real rents have been flat for more than a decade,” he said. “That being said, the gap between owning and renting a home is widening right now, which makes some renters think twice before buying because of the difference in affordability.”
The CMHC will be collecting data for its 2006 rental survey this month, a process that will include individually owned condominiums for the first time. Muir said with the supply of purpose-built rental units remaining virtually stagnant over the past decade, investor condominiums are contributing much-needed supply to the market.
“On the demand side, we have fairly strong demand coming from young singles and couples and families who are finding the prices in the ownership market too high for them to afford,” said Muir. “We are also seeing a number of migrants moving here in their search for jobs from other parts of the country, as well as internationally and they are getting sticker shock at the prices being asked.”
Low vacancy rates are the norm, not the exception in Vancouver. Muir said for five of the past 10 years, the vacancy rate was at or below 1.1 per cent.
“For the rental household looking to find something to rent, it can be a difficult task,” he said.
The Vancouver CMA has 110,000 purpose-built rental units while the number of informal basement suites remains uncounted and condos will be tallied this fall.
Unlike some other rental markets where landlords offer incentives to fill vacant suites, there is no such need here.
“Because vacancy rates are so low, it is highly unlikely that there are a great deal of bargains available or price slashing going on by companies,” said Muir.
Despite that, tenants looking to get more for their money may look at older buildings that haven’t been upgraded and while they trade off such perks as granite countertops and party rooms, they may get apartments built on a larger scale than today’s compact units.
SUMMER IS HIGH SEASON
Phoebe Jones manages apartments and townhouses throughout the Lower Mainland for owners, with units ranging from a one-bedroom apartment in Richmond’s Steveston area at $730 to a three-bedroom townhouse in Surrey near Guildford at $850. Jones said in her experience, tenants looking on the west side of Vancouver tend to be students, or singles and couples without children.
“If you move out to the Surrey area, you could very well have a whole family living in two bedrooms,” she said. “If you are a young family and your job is out in the valley area, there is no use living in Vancouver and paying the higher rents.”
“On the other hand, if you have children in university, or you work downtown, you would much rather live on the west side where you don’t necessarily need a vehicle.”
Kasia Galecka, who runs apartmentguide.ca with her father and the accompanying apartment listing website, mywestend.ca, said the period from June to September marks the high season for apartment rentals.
“It is usually the hardest to find a place between June and September, when there are only 40 to 80 apartments a month listed, compared to winter months when there can be 150 listings in a month,” she said.
Galecka said with many rental buildings in the West End having mostly studio suites and one-bedroom units, finding a two-bedroom suite is difficult. Of the 443 company-owned rental buildings in the West End, only 59 have advertised two-bedroom apartments in the last four years, according to Galecka.
“I’ve had friends with roommates looking and it is difficult,” she said. “Usually they end up renting a condo.
“Then you are dealing with an owner or a management company.”
And the price can go up considerably for a new or nearly new condo.
One listing on Galecka’s site has a two-bedroom condo on Georgia Street going for $2,000 a month.
“If you are willing to go farther out, you can definitely find a two bedroom for $1,000, but in the West End and Kits, it is going to be more expensive,” she said. “There are not many of them here and they are kind of a pricey commodity.”
What $1,000/month rent gets you in an apartment or townhouse
1. Vancouver downtown, near Coal Harbour — Studio, one bath, 568 sq. ft., heat not included, hot water included, stove, fridge, west facing, no pets, wheelchair-friendly building, granite counters, in-suite washer and dryer, dishwasher, garburator, microwave.
2. Downtown Vancouver — Just off Robson near public library, a studio with one bath, 438 sq. ft., hot water, heat not included, stove, fridge, west view, takes pets, wheelchair friendly, in-suite washer and dryer, dishwasher, micro-wave, common BBQ, social room, fitness room, games room, media room.
3. South Granville — Bordered by West 12th and West 16th Avenues and Granville and Burrard, one bedroom, one bath, 675 sq. ft., heat, hot water, stove, fridge, northwest view, no pets, wheelchair friendly, outdoor swimming pool, common BBQ area, fitness room, sauna and games room, common laundry.
4. Arbutus/Kerrisdale in Vancouver’s west side — One bedroom, one bath, 720 sq. ft., includes heat, hot water, stove, fridge, east view, no pets, newly renovated suite with common laundry.
5. New Westminster — Two bedrooms, one bath, 885 sq. ft., includes heat, hot water, stove, fridge, south view, no pets, outdoor pool, social room, games room and common laundry.
6. Surrey — Three bedrooms, two baths, 1,452 sq. ft., heat, hot water, stove fridge, west view, no pets.
7. White Rock — One bedroom, one bath, 762 sq. ft., heat, hot water, stove, fridge, north view, no pets, common laundry.
8. Abbotsford — At $805, three bedrooms with one bath, 1,100 sq. ft., heat, hot water, stove, fridge, south view, no pets, wheelchair friendly.
WINNING AT THE RENTAL GAME
Here are some helpful hints and contacts to help you find the perfect rental home.
– Walk or drive around the area you want to live and look for signs. Go early on the first of the month to get the best selection of apartments coming available the following month.
– Check classifieds in the newspapers, check websites and bulletin boards in your school or other locations where people post rental signs. If the building has a resident manager taking applications on site, knock on the door.
– Be ready with references. Likely you’ll be required to provide a reference from the last place you lived so if you regularly hosted parties that attracted the police or never paid your rent on time, that could be a problem. Also you may be asked for an employment reference. Landlords are not allowed to refuse to rent to a tenant based on the tenant’s income, as long as that income is legal.
– Be prepared for a credit check. You can check your own credit to ensure they are no unpleasant surprises by going to the Equifax Canadian website at www.equifax.ca or TransUnion at www.transunion.ca.
ON THE WEB
www.rto.gov.bc.ca
www.amsrentsline.com
www.apartmentguide.ca
www.gatewaywest.com
www.crosbypm.com
www.bchousing.org
www.craigslist.com
© The Vancouver Sun 2006
