Landlords and property managers in Metro Vancouver are offering bonuses, such as a free month’s rent, in an attempt to woo potential tenants.
A combination of sky-high prices and a low vacancy rate — currently sitting at one per cent — has long plagued those in the hunt for a new home, but, according to experts, the market is now on the precipice of change.
“For the first time in six years, it’s a tenant’s market,” said Moe Mousavi, a property manager at Macdonald Realty and the founder of DeluxeProperties.ca.
He says landlords are now being forced to offer incentives because there’s more supply in the market than demand.
One of Mousavi’s clients has a new building with 157 available rental units. He says each one includes incentives.
On the front page of the Georgia Straight this week, a giant advertisement for The Westminster, a new apartment building in New Westminster, offers to cover the cost of packing up your old home and moving it into your brand new suite.
A few pages deeper, two more Vancouver properties, Peter Wall’s Yaletown and Shannon Mews, advertise “rental incentives.”
A simple search on Craigslist brings up dozens of listings.
And it’s not just developers offering bonuses. Mousavi says landlords with single units are also having to fight for tenants.
“A lot of these people are under pressure because of mortgages … so it’s, sort of, a desperate attempt to get their properties rented,” he said.
Why the sudden increase in units?
Thomas Davidoff, associate professor at the UBC Sauder School of Business says we’re seeing an increase in the rental market due to a combination of factors, including legislative measures by the province.
He says the empty homes tax and speculation tax, paired with the completion of many new apartment buildings are driving the supply.
“When you’ve got more listings than people looking, you’re going to start to see some concessions,” said Davidoff.
He says would-be tenants can now afford to play the field more, as compared to the last few years.
“People really felt that there was a gun to their head and if they didn’t snap a place up instantly …that it would surely be gone,” he said.
Still, Davidoff urges caution as pretty perks can often be accompanied by expensive leases.
Rental prices falling … slowly
Rental units haven’t seen the same fall in prices as the real-estate market, but Mousavi says there has been a slight shift.
And he expects it to grow over the coming year.
“Now, $2,300 is affordable for a one bedroom. I think next year … we’re probably looking at $1,800 for a one bedroom.”
A chance for renters to breathe, he says, after years in an unforgiving market.