Should Vancouver’s average rent decrease spark optimism?

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Since last month, asking rent has seen a decrease in Vancouver. Is it a cause for celebration?

According to Rentals.ca and Zumper, rent has decreased compared to last month for both average and median rents, respectively.

While some reports have suggested that the recently announced Airbnb regulations might play some part, there’s more to this story, and the rent reports don’t tell that story in its entirety.

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According to Rentals.ca, month-over-month, the average rent for a one-bedroom in Vancouver has dipped a considerable 3.5% to $2,872. That’s still a 6.7% increase year-over-year. Rentals.ca looks at the asking rent rates.

Two-bedroom units also saw a decline of 3.4% to $3,777, but still a 5.5% increase year-over-year.

Burnaby stayed steady at #2 as Canada’s second most expensive place to rent. The average for a one-bedroom in Burnaby was $2,647 last month, a 2.0% decrease but a 16.1% increase year-over-year.

Zumper’s report, which looks at median rent rates, says Vancouver saw a 0.7% decline month-over-month for a one-bedroom, bringing it down to $2,780, which still marks an 11.20% increase year-over-year. Median rent for a two-bedroom went up 1% to a staggering $4,000. Zumper’s data is also based on active listings.

Sorry to burst your housing bubble

While it’s a step in the right direction, the rent decrease in Vancouver could be the market seeing a stabilization after rental rates surged this summer.

Managing broker Keaton Bessey posted on X about the Rentals.ca report and had some more insights.

Remember…asking rents differ strongly from actual rents.

As a comparable, we just barely rented a brand new, 850sqft 2 bedroom, large balcony, 40+ floor, for $3,200 in Burnaby.

Currently struggling to rent a couple others for the same amount.

We’re seeing rents down 10-15%… pic.twitter.com/LiT7hv6mpJ

— Keaton Bessey (@kbessey) November 12, 2023

He also suggests that some sellers not getting traction in the market are putting their properties out to rent to “test the market.”

Seasonality plays into it, however, the major factors here are:

– high expenses (mortgage rates +++)
– many non or inexperienced Landlords trying to “get their number”
– many sellers who are not getting traction putting it on for rent to “test the market”
– Large number of…

— Keaton Bessey (@kbessey) November 12, 2023

Does it mean the bubble is deflating, as one X user suggested?

We are seeing rents stabilize after a glut of pre-sale closings.

We’ll see how many of these terminated listings actually needed to sell.

Its wonky out there, but homes are renting.

— Keaton Bessey (@kbessey) November 13, 2023

We asked Bessey for some more insights on the rental market.

Bessey told Daily Hive that until we build more and deal with the immigration taps that are “wide open,” rents will continue to increase.

“Maybe not as ridiculously quickly as 10-15% YoY like they have the last two years, but we’re so behind on building supply, and there is no end in sight for positive net migration. It’s not rocket science.”

We also asked about the Airbnb regulations, and Bessey doesn’t believe they’ll be effective in the rental market until May.

“There is so much evidence of non-enforcement in Vancouver so far that I don’t think many units are coming to the long-term market right away, or at all,” he said.

Bessey also doesn’t think that the month-over-month change reflected in these reports indicates a start of a downward trend.

“What we saw–especially in Burnaby–since Labour Day was a glut of pre-sale completions at the same time the market started to slow, as it does every ‘normal’ fall. As we still have not seen a normal fall since before the pandemic, we’re always cautious to call it normal.”

If you’re navigating the Vancouver rental market, let us know your experience in the comments.