The Canadian Mortgage and Housing Corporation (CMHC) reports that rental price inflation slowed in 2024 as more rental buildings were completed and immigration pressures lessened. According to CMHC’s Fall 2024 report, vacancy rates in B.C. have increased, and rental price hikes are moderating after years of sharp rises.

Source: Western Investor

Despite the slowdown in rent growth, renter affordability remains “strained,” the agency noted. In Vancouver, a two-bedroom purpose-built unit averages $2,314 per month, while Victoria’s average is $1,993—both significantly above the national average of $1,447. Secondary market condos are even pricier, with Vancouver’s average at $2,827 compared to the $2,199 national figure.

The report highlights that average monthly rents for a two-bedroom purpose-built unit rose by 5.5% in Vancouver, slightly above the 5.4% national increase. In Victoria, rents grew at a slower rate of 3.6%. However, when rental units changed tenants, rents surged by 23.5% in 2024, consistent with 2023 levels. These turnover rent increases accounted for over 40% of the overall rent growth.

B.C.’s private rental vacancy rate rose to 1.9% in October 2024, up from 1.2% the previous year. Vancouver’s vacancy rate stands at 1.6%, while Victoria’s is at 2.6%. Kelowna saw one of the largest jumps, with its vacancy rate climbing to 3.8% from 1.3% in 2023. The average rent for a two-bedroom purpose-built unit in Kelowna last October was $1,916.

Higher vacancy rates indicate “waning demand,” CMHC suggested, as most rent increases occurred in late 2023, and asking rents have recently declined. Nationally, rental costs are slowing due to factors such as rising unemployment (especially among youth), increased construction of purpose-built rentals, and a reduction in immigration levels from record highs.

The report also warns that much of the new rental stock consists of higher-priced units, unaffordable for many renters and mainly targeting higher-income households.

In the Greater Vancouver area, rental stock growth is increasingly happening in suburban areas rather than the city itself. North Vancouver, Surrey, and the Tri-Cities have seen relatively more units added due to lower land costs compared to Vancouver.

“The purpose-built rental apartment universe expanded at a slower pace in 2024 compared to the previous two years. Still, this year’s growth is notable compared to the past decade, with most of it happening outside the City of Vancouver,” CMHC stated.

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Tags: Vacancy Rates, CMHC, Canadian Mortgage and Housing Corporation, Vacancy Rates Rise, vacancy rates in BC