Metro Vancouver's home completions need to rise by 61% to 38,000 units per year | Daily Hive

Metro Vancouver's new annual housing completions need to rise by 61% to 38,000 units: report

Construction progress on the first phase of the Senakw rental housing complex, as of March 17, 2025. (Kenneth Chan)

Approving new housing projects is one thing, but seeing them actually completed is an entirely different challenge for municipal governments in Metro Vancouver.

There continues to be an immense supply/demand imbalance in the region, according to a new Regional Housing Needs Report by Metro Vancouver Regional District.

Between 2020 and 2024, the region saw an average of 23,424 new home completions per year.

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Over a long-term projection between 2022 and 2041, in order to meet demand, the region would need to increase the average rate of new housing completions by 61 per cent to an average of 37,757 units per year, or 14,333 more homes than what is currently being achieved.

Over the very near term, following several years of significant population growth emerging out of the pandemic, the need is even greater. Between 2022 and 2026, the shortfall is an average of 22,668 units per year. In order to fill this current gap, the annual rate of completion would need to soar by 97 per cent to 46,092 units per year.

This includes a particularly pronounced shortfall in rental housing.

With rising home prices pushing ownership opportunities, between 2016 and 2021, the share of renters in Metro Vancouver increased from 36 per cent to 38 per cent, while the share of owners decreased from 64 per cent to 62 per cent, according to Statistics Canada. Unattainable home ownership has pushed more households into renting.

A breakdown of the annual housing tenure completion averages from 2020 to 2024 shows that, over this five-year period, there was an annual average of 4,135 secured purpose-built rental homes, 6,730 secondary rental units (such as individually rented condominiums), 9,315 strata market ownership condominium units, 3,172 freehold ownership homes, and 32 co-operative homes completed.

But between 2022 and 2026, there is an estimated need of 96,803 new secured purpose-built market rental homes — an average of 19,361 market rental homes per year, or nearly five times more than the current annual average of completion.

The gap is even wider for affordable secured purpose-built rental housing, with 57,000 of such units needed at below-market rents between 2022 and 2026 — an average of 11,400 units per year. Based on 2023 conditions, there is a need for 33,400 studio or one-bedroom units rented at $1,450 per month ($58,000 annual income per household), 11,300 two-bedroom units at $1,800 per month ($72,000 annual income per household), 7,300 three-bedroom units at $2,150 per month ($86,000 annual income per household), and 5,000 three-bedroom nits at $2,688 per month ($107,500 annual income per household).

However, an average of 433 affordable rental homes have been completed per year between 2018 and 2023. To meet the actual need, the pace of completions for this highly discounted rental housing tenure segment would need to soar by a staggering 2,533 per cent, or 10,967 units per year.

Such below-market rental housing projects are increasingly reliant on direct government funding and/or low-cost loans offered by governments.

The proportion of non-market housing across the region that had a financial relationship with BC Housing increased by 2.7 per cent year-over-year in 2024.

In 2024, nearly 48,000 existing non-market housing units across the region had a financial relationship with BC Housing, with about one-third of these units having operating agreements that expire by 2050. Two-in-three of these expiring operating agreements will occur by 2028, mostly impacting independent seniors and low-income families.

Overall, across all housing tenure types, Metro Vancouver needs to reach 11 new home completions per 1,000 residents between 2022 and 2041 — up from the current average of eight units per 1,000 residents between 2020 and 2024. This elevated ratio has been achieved before; between 1970 and 2024, there were 16 years when completions reached or surpassed 11 units per 1,000 residents, including an annual high of 14 units per 1,000 residents in 1973 and 1974.

With 5,389 units completed in 2024, new secured purpose-built rental housing completions have risen recently from the previous historic lows.

There are some early signs that the influx of new rental housing supply is turning the tide against the high vacancy rate, which saw a slightly wider gap of 1.6 per cent, whereas it was previously at or under one per cent. As well, the average annual rent increase has slowed from 9.1 per cent in 2023 to 4.5 per cent in 2024.

In recent years, weakened ownership demand has led many developers to shift their focus toward building secured purpose-built rental housing. Historically, secondary rentals — unsecured rental homes, particularly within new condominiums and secondary suites — have accounted for the majority of new rental housing. However, with declining ownership demand, especially for condominiums, there is now an even greater reliance on secured purpose-built rental projects successfully moving forward.

But even secured purpose-built rental housing projects are struggling to move forward after receiving municipal approvals, due to factors such as growing land acquisition and construction costs, and challenging borrowing conditions to cover the heightened land and construction costs.

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