Rental markets are cooling
More supply arriving, demand weakening
Victoria landlords and rental developers: Do your proformas with 10% and 20% off current market rents to make sure they still work.
Would not be surprised at all if we hit that in 2025/2026.
A recent video by Andrew Chang (About That). Reddit thread.
To summarize: There’s lots of supply from rental and condo projects (initiated a few years ago) now being completed. Demand is down due to international-student caps and immigration cuts, and also the weakening economy, with fewer younger people moving out on their own.
The result is that asking rents are declining. (Anecdotally, I’ve heard stories about people in Vancouver being able to negotiate lower rents with their landlords; I presume they moved in relatively recently and are paying close to market rents.)
But we can’t be complacent, as Mike Moffatt points out. If the economy strengthens again, demand will go up again, so we need to figure out how to keep adding supply. That likely means pushing down costs, by speeding up approvals and reducing development charges.
More
Monthly reports from rentals.ca, showing rental growth flattening: September 2024, October 2024
Jay Parsons, summarizing a recent National Multifamily Housing Conference: Looking ahead, investors in the US expect slowing supply and higher rents.
The 10 Biggest BC Real Estate And Development Industry Questions For 2025. Howard Chai, Storeys. From the perspective of the industry, what are the most important unknowns?