October Real Estate Happenings
In Vancouver, Kennedy Stewart took the mayor's office along with a divided council. Stewart beat out Sim in a nail biter with just 957 votes. We also elected a grab bag of councillors: three Greens, four NPA, and one each from OneCity and COPE. Stewart campaigned hard on fixing housing. A core pillar of his platform is to bring in 85,000 new units in the next 10 years:
- 25,000 non-profit
- 60,000 private sector
The 60,000 private sector unit breaks down into 35,000 condos, coach houses and townhomes and 25,000 purpose built rentals and laneways. He also promised to triple the empty homes tax, which is currently set at 1% of the vacant home's assessed value.
I want to mention his promise to bring in a real-time online dashboard. I'm biased, but I believe this is an opportunity to bring civic engagement into the 21st century. I've archived his platform for future reference.
In Victoria, the NDP government worked with the Greens to secure passage of their new Speculation and Vacancy Tax. In Vancouver, this would apply on top of any measures by the city. The tax targets areas suffering from severe housing shortages and is designed to encourage full utilization of the housing stock. This amendment of the NDP's initial proposal modifies some of the tax's key aspects. After the amendments, the tax will be 0.5% for Canadians and 2% for foreigners who leave their homes vacant. There are a series of exemptions for situations like vacant properties, divorces and properties under development.
At the federal level, Poloz has hiked the overnight interest rate to 1.75%. This is the fifth hike since rates have come off rock bottom. In his speech, Poloz indicated that the bank is targeting a "neutral stance" somewhere between 2.5% to 3.5%. Don't forget - the higher the interest rate, the higher the stress test for mortgage qualification.
October Rental Stats
In October, we saw 5,398 listings which is 3.47% higher than last month and 11% more than October last year.
Prices for 1 bedrooms have been static, but the median two bedrooms rent dropped 1.9%. This drop is largely attributable to cooling prices for furnished 2 bedroom units, which came down 2.4% since September. It's probably the short term rental (STR) regulations starting to bite. Back in April, the premium for a 2 BR furnished unit was 40.1%. This premium has dropped to 28.3%, putting it in line with the premium for 1 BRs.
Volume and price growth in the furnished 3 BR segment is driving the large MoM increase in 3 BR prices (+6.7%). This is another likely effect of the STR regulations. 3 BR volumes have spiked 25%, changing the mixture of furnished to unfurnished units and pushing up the median. Looking at the unfurnished and furnished 3 BR units separately, price increases were moderate at .3% and 2.6% respectively.
- 1 bedrooms $1950 (0%)
- 2 bedrooms $2650 (-1.9%)
- 3 bedrooms $3200 (+6.7%)
|Beds||Unfurnished Vol||Furnished Vol||Furnished Pct|
|1||1529 (+.9%)||838 (2.9%)||35.4%|
|2||1548 (+4%)||636 (4.4%)||29.1%|
|3||401 (-1%)||138 (25.5%)||25.6%|
|Beds||Unfurnished Price||Furnished Price||Premium|
|1||$1850 (0%)||$2350 (4.4%)||27%|
|2||$2495 (-.2%)||$3200 (-2.4%)||28.3%|
|3||$2960 (.3%)||$4000 (2.6%)||35.1%|
If you want to stay up-to-date on Vancouver's rental market, sign up for my newsletter in the navigation bar.