It took a pandemic for Metro Vancouver’s rental housing market to turn a corner towards both improved availability and affordability.
For several months, Daily Hive Urbanized has been monitoring Craigslist listings in the region, where there has been an emerging trend of new listings offering weeks and even up to months of free rent.
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There was just a trickle of such listings a few weeks into the health crisis starting in the middle of March, but as of today there are hundreds of such listings from landlords attempting to lease their units.
A combination of factors can be attributed to the slower uptake in rental housing supply, including reduced immigration and domestic migration from continued health safety concerns over air travel, and government-enacted travel restrictions.
One major segment of the rental market revolves around international students, with a significant number of these tenants cancelling their leases early and returning home at the start of COVID-19. There are typically approximately 100,000 international students in the region.
As another factor, prospective renters desiring to upsize or downsize delayed their search for a new home, while some landlords temporarily suspended their showings.
“Over the short term, the pace has slowed as vacating tenants were uncomfortable with viewings and there was no appetite for renters to view suites that were occupied. This was especially true for the month of April, it improved slightly in May and although we are getting a lot of interest in June it is still not back to the level of earlier in the year,” Nick Marini, the vice-president and general manager of Macdonald Property Management, told Daily Hive Urbanized.
“There is concerns that reduced immigrations, migration and the uncertainty of the international student status that we may experience a slightly higher vacancy rate later in the year which will certainly require inducements such as free rent periods.”
He says the free rent periods are generally being offered more for the newly-built residential projects. As well, his firm is seeing rent reductions of between 5% and 10% in some areas. Another factor is the surge in new supply from short-term rentals entering the rental market.
For a few examples of free rent, at the newly-completed first phase of The Amazing Brentwood, there is a listing for an 863-sq-ft, two-bedroom unit for a rate of $2,710 per month, with the first two months free.
Amongst a number of UBC campus listings, a month of free rent is being offered for a relatively new condominium on Walter Gate Road — a 416-sq-ft unit for $1,950 per month.
In North Vancouver, a renovated 1,400-sq-ft, three-bedroom townhouse is listed for $3,749 per month, but it comes two months free.
Within downtown Vancouver, there are a number of listings for the newly-built Vancouver House that offer free rent or a steep discount. One listing for a 480-sq-ft studio, for instance, is offering four months at 50% of the $2,205 per month rate.
Beyond Craigslist’s platform, Rennie is marketing Reliance Properties’ newly-completed 108 market rental homes at 1188 Bidwell Street — right next to the new Safeway Davie store. The housing market’s conditions have prompted them to offer a “free rent incentive.”
For years, a similar phenomenon was experienced within Seattle’s rental housing market, where a drastic surge in new rental construction led to supply overtaking demand. It led to increased competition between landlords, which ultimately caused average rents to fall, particularly for older units. And in order to entice tenants, landlords offered not only weeks or months of free rent, but often in combination with Amazon and Microsoft gift cards worth as much as $2,000, based on Daily Hive Urbanized’s observation last year.
In a market update this week, PadMapper reported average rents within Vancouver are down year-over-year by 5% for a one-bedroom unit and 6.3% for a two-bedroom unit. However, in neighbouring Burnaby, average rents have increased year-over-year by 11.5% for a one-bedroom unit and 4.1% for a two-bedroom unit.
Disclaimer: While there are many legitimate listings on websites such as Craigslist, it is always important to be careful and do your due diligence as a renter.