Seniors face rent hikes despite rise in independent-living units

Rent increases grow old

Higher vacancies aren’t translating into lower rents for seniors, according to a new Canada Mortgage and Housing Corp. (CMHC) report.

The vacancy rate for independent-living units stood at 4.2% in 2019 on an inventory of 31,779 units. This was an improvement from the 3% vacancy rate a year ago, when there were 31,455 units.

Despite the addition of 324 units and greater vacancies, average monthly rent for a senior’s independent-living unit in B.C. rose 5.4% to $3,275 over the past year. Burnaby alone bucked the trend in the Lower Mainland, with rents dropping 4.3% to $2,654 a month. This was the biggest drop of anywhere in the province; the cheapest average rent in the province is in Parksville/Qualicum at $2,279 a month.

The CMHC noted that a declining number of bachelor suites meant that these units saw some of the greatest increases in monthly rents. In the Lower Mainland, rents for these units rose an average of 28.6%, while in the eastern Fraser Valley, they rose 61%. Nanaimo saw the second-greatest increase of 57.6%, with rents rising to $2,502 a month.

The most expensive independent-living units for seniors are two-bedroom units on the North Shore and in Vancouver, with rents running $6,944 and $6,764 a month, respectively.

According to a recent survey for the Urban Development Institute by market research firm Ipsos, 74% of B.C. residents believe a lack of housing options is keeping rents high while 72% don’t believe affordable housing options have increased over the past two years.

Vancouver-based seniors housing society Brightside Community Foundation says the number of homeless seniors has quadrupled since 2005.

The CMHC recently granted the Seniors Services Society of BC $95,501 to study the needs of seniors who rent in partnership with six other organizations, including Brightside, the Gerontology Research Centre at Simon Fraser University, Landlord BC and the BC Non-Profit Housing Association.

Benchmark drop

The benchmark price of a residential property sold in the Real Estate Board of Greater Vancouver’s area dropped for the 12th consecutive month in May. It’s now $1,006,400, or more than 8% below the price a year ago. While the rate of decline slowed to just 0.2% in May, conditions are such that Ontario economist Will Dunning’s latest report for Landcor Data Corp. indicates that markets remain bad and are worsening.

This is from the perspective of sales activity. However, Statistics Canada reports that the cost of a new home in Metro Vancouver inched up in March for the first time in four months. According to the agency, this was “mostly due to improving market conditions as reported by builders.”

However, Urban Analytics Inc. principal Michael Ferreira says the market remains on hold as government policies continue to weigh on market sentiment. While economic fundamentals are strong, confidence is not.

“The softening market conditions and reduced revenues projects can expect to achieve in today’s market has caused many developers to postpone launching new projects, particularly in the concrete condominium sector,” he writes in his own report on the sector. “Developers continue to monitor and evaluate market conditions and achievable revenues.”

Nevertheless, 80% of all units set to be completed in the next three years are spoken for.

Staying ahead

A strong economy is helping keep B.C. residents ahead rather than in arrears when it comes to mortgage payments. Despite rising to 0.15% of all mortgages in January, the proportion of mortgages in arrears for three months or more is close to historic lows, according to the Canadian Bankers Association.

This works out to 955 mortgages in arrears, up from 913 in November. The increase isn’t necessarily cause for alarm, however. A greater number of mortgages means that the figure is a smaller proportion of all mortgages than in the past.

With the Bank of Canada set to hold the line on interest rate increases for the time being, chances are slim that many homeowners will find themselves in straitened circumstances and mortgage payments under pressure.