In Metro Vancouver two and three bedroom rentals are at 1%
Kimberly Greene
Mortgage Broker News
As affordability continues to plague homebuyers in some of Canada’s hottest housing markets, a growing number of families are wondering whether homeownership is the best fit for their families after all. In fact, the latest CHMC data suggests that demand for apartments with family size floor plans in both the GTA and the GVA is outstripping supply by a wide margin.
In Metro Vancouver and the GTA, the vacancy rate for two-and-three-bedroom apartments is between 1% and 1.4%. Over the past five years in Metro Vancouver, rental rates for three-bedroom units have risen by 7.4 per cent and six per cent for two-bedroom formats.
Demand is such that construction of family-focused rental housing is expected to surge in many Canadian cities. Developers have had to drill down on what families want, and how it different from more typical renters of studio and one-bedroom units.
“Families who are renting in urban areas are renting in places that are amenity rich, but also there’s amenities for the whole family,” said Wendy Waters, Vice President of Research Services and Strategy at GWL Realty Advisors (GWLRA). “What we’re trying to provide is some of these conveniences that you might have if you had a detached house or a semi-detached.”
GWL Realty Advisors (GWLRA) has six residential projects underway with components catering to families in the GTA, Metro Vancouver, Edmonton and Montreal and two more projects in Calgary and Ottawa are expected to be approved this year. These components include outdoor and indoor dedicated play spaces for children, recreation rooms and multipurpose rooms appropriate for all age groups, as well as outdoor spaces for family gatherings. Rental buildings are increasingly providing all of these amenities that previously may have only been available if you could afford a single family house or a high-end condo, now they’re available in rental buildings.
Waters said that when they’re building, it’s for the long term, so these trends are very much on their radar. Developers have to be thinking ahead of what’s changing in the urban dynamic and the fact that people are also staying in rentals for longer periods of time. Apart from affordability, people are also looking to rid themselves of commuting headaches and being in easily-accessible areas is a growing priority.
Despite the greater demand for rental housing, however, Waters doesn’t think it will do anything for the residential housing market. These new buildings are a response to demands that are already there, she said.
“What we do believe is that if we’re providing some of these higher quality amenities, what we may see is families who rent with us [living] there longer because they look at what they have to give up if they were to then go buy an older home or condo that doesn’t have these amenities,” she said. “There’s such a shortage of rental housing . . . I don’t see it as being something that’s going to affect demand for townhouses or affordable rowhouses; I don’t see it as affecting that market as much. I think it just provides another option, and I think our big dynamic urban cities in Canada and across the world, North America need to provide families with more options at all the price points.”
Right now, this also means focusing on urban suburban areas, which give families the best of both worlds in terms of amenities and space. Again, Waters said, it’s all about choice. Some families are going to prefer to do whatever they can to purchase homes in that “missing middle” tier, while others are going to go for purpose-built rental.
Another advantage to rental, Waters said, is security of tenure. When renting a condo or other property type, people are out of luck when the owner decides to sell or reclaim possession of the units, and that can be incredibly disruptive for a family. And at the end of the day, everyone’s looking out for number one.
“Purpose-built rental is made for renters, so you are the customer, as opposed to in a condo building,” Waters said. “You don’t have quite the same privileges that you would have in purpose built rental. So we’re offering that, and security of tenure is a big issue, particularly in Vancouver and Toronto.”
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