The first release of data from the 2016 census indicates that the proportion of homes in Vancouver not “occupied by usual residents” rose slightly from 2011, but remains below 10%.
A quick analysis indicates that just 8.7% of homes in Vancouver – including the University of British Columbia (UBC), which is technically outside city limits – were vacant last year, up from 7.8% in 2011.
UBC claimed the dubious honour of being the area with the greatest proportion of homes without their usual residents – either vacant, or occupied by temporary or foreign residents – at 26.6%. Removing UBC, the vacancy rate for Vancouver slips to just 8.2%.
The three census tracts along the downtown waterfront west of Homer Street are the next least-populated areas, with non-occupancies averaging 19%.
The areas posting the biggest increases in non-occupancy, however, were those subject to significant redevelopment: Renfrew Heights and Collingwood, as well as Cambie, Kerrisdale and Mackenzie Heights.
Similarly, areas with significant completions of housing saw vacancies decrease (see “Housing has helped attract population growth in B.C. regions,” page 22).
Technology companies account for 40% of overall tenant demand in downtown Vancouver, according to Colliers International. With downtown vacancies dropping to 6% at the end of 2016, just how easy is it for tenants to find space that meets their needs?
Spark Software Ltd., which develops customer relationship management software for residential property sales, looked for almost a year to find space that met its needs.
“We needed space for up to about 12 people. We have eight people right now, but we’re growing,” said Spark CEO Simeon Garratt, who co-founded the company with Cody Curley in 2012. “Gastown was where our previous office was and so we were maybe hoping to stay in that area, but the prices in that area were pretty insane for what you got. … Finding a small enough space in a well-managed building that wasn’t super overpriced was a pretty difficult challenge.”
Working with Colliers, Spark got first dibs on a space in Yaletown, originally ruled out as too expensive. Proximity to rapid transit and other factors made the space, and the neighbourhood, attractive.
Spark signed for about 1,500 square feet at $38 a square foot, or close to $6,000 a month.
“It turns out it’s a decent amount cheaper than a lot of other places,” he said. “Smaller spaces in Gastown that were not as nice in a no-amenities building were well north of that – $7,500, $8,000, $9,000, $10,000 pretty easily.”
While it formerly shared space, first at GrowLab Ventures Inc., then at the offices of Baron Group, Spark wanted a dedicated space where it could continue to grow annual revenue beyond the current $1 million. With 65% of its business outside Vancouver – primarily New York – modest but professional premises were important.
“We got pretty lucky,” Garratt said. “It’s still not a cheap space, but it’s something we can grow into.”
Spark isn’t the only tech company expanding in Yaletown, where Avison Young notes improved deal velocity in recent months.
SAP recently added 45,000 square feet to its premises at 910 Mainland Street, while Microsoft renewed its commitment to 64,500 square feet at 858 Beatty Street.
Airbnb vs. rentals
U.K.-based Nextday Property Ltd. recently came out with a ranking of global cities that gives a new twist on affordability and the economics of short-term stays.
Nextday’s analysis ranks cities according to the estimated time to recoup the price of a three-bedroom residence via Airbnb rentals. Vancouver places 68th out of the 75 cities considered, at 214 months. A standard rental would take 341 months, which sounds long but which puts Vancouver at 46th out of 75.
And there you have a glimpse of the challenging nature of such rankings: while short-term rentals offer a faster payback, there are plenty of other places where the payback is even faster. Yet when it comes to traditional rentals, Vancouver has an edge over many other cities.