Foreign students, downsizing seniors, and tech industry workers are all fuelling rental demand
Considering the sustained hunger for British Columbia’s rental units, a markets researcher has argued that around 30,000 units need to be delivered in the next two years to answer this demand.
Urban Analytics Inc. principal of market research Michael Ferreira cited foreign students as a particular area of concern, as this demographic alone might need anywhere from 10,000 to 20,000 units.
GWL Realty Advisors Inc. also estimated that downsizing senior Canadians will need around 38,000 units. Their next generation would require a further 10,000 to 15,000 units.
“We have to stop talking and actually start building, because if even a fraction of this potential demand materializes, we’re nowhere near where we need to be in terms of supply,” Ferreira warned in a recent speech to the Urban Development Institute, as quoted by Business in Vancouver.
“How long do you think before we see a $5 per square foot rent in downtown Vancouver or a $4, $4.50 per square foot rent in Burnaby, Richmond and some of these other places?”
Moreover, the burgeoning tech sector is bound to attract even more potential tenants, which would require additional construction of up to 15,000 units on top of existing and projected delivery.
Landlords are more than likely to enjoy significant windfalls. Statistics Canada data indicated that BC and Ontario play host to a large proportion of housing investors – and many of them have chosen to rent out these properties.
“The number of small landlords shouldn’t surprise many. Canada’s addiction to cheap financing makes condo development more favourable,” Better Dwelling stated in its analysis of the StatsCan data.
BC had over 268,600 multiple-property owners in 2018. Vancouver accounted for 53.6% (143,910 multi-property owners) of this contingent.
Meanwhile, the volume in Ontario last year was 835,175, with around 43% (359,475 owners) in Toronto alone.
