Greater Victoria’s hot real estate market is making it tougher for renters to find accommodation in an already chronically tight rental climate.
Greater Victoria’s average apartment vacancy rate has dropped to 0.6%, down from 1.5%
a year ago, according to the latest figures from Canada Mortgage and Housing Corp. The national average is 3.3%.
There are 50,836 rental units of all types in the capital region, but housing advocates say it simply isn’t enough.
Jayne Mayfield, head of the Tenant Resource and Advisory Centre in B.C., said competition is fierce for rental units. Landlords will see 30 to 40 people show up for an open house on a rental unit, she said.
The market is “really, really tight,” Mayfield said. A healthy vacancy rate would be between five and seven per cent, she said. “We need more rental housing,” said Mayfield.
Affordability is a big issue, she said. In the capital region, 47% of tenants spend more than 30% of their income on rent, and 24% spend more than half their income on rent.
The high rental demand was evident last month, when hundreds of potential renters lined up to view the new 16-storey Hudson Walk One, which has only 178 rental units.
Developers Townline and Peterson Group had 1,200 people register prior to the public viewing, said Chris Colbeck, Townline’s vice-president of sales and marketing. That’s nearly double the 650 names registered two years earlier when the 120-unit Hudson Mews rental project opened nearby.
Rents in Hudson Walk One run from $1,150 to $1,775 per month in the non-smoking, pet-friendly building.
David Hutniak, CEO of Landlord B.C. with 3,300 members, said that, on a per-capita basis, more rental units are being built in the capital region, much of it in or near the downtown, than in Vancouver. “That’s a positive,” said Hutniak.
In all, 1,524 new rental apartments are under construction in Victoria, and an estimated 1,070 more have been approved by the city, according to a survey from Colliers International.
Hutniak said some owners of older rental properties are cashing out because of the premium prices.
The average price “per door” for a Victoria rental apartment building is now $185,500, up from $152,200 a year ago, according to Colliers multi-family specialist Ken Cloak. He noted the average capitalization rate on smaller Victoria rental buildings is 4.3%, about 1% higher than the average in Vancouver, where the per-door price for apartment buildings is now north of $240,000.
“We are definitely seeing more interest from Lower Mainland buyers looking for higher returns,” Cloak said.
