There’s very little good news on the horizon for those looking for rental accommodation in Victoria, according to market experts.
A significant amount of new rental supply to ease the pressure on the region’s vacancy is a year or two away, the City of Victoria is still working on a plan to deal with a lack of rental housing and the cost of what is available continues to rise because of increased demand.
“These are very tight market conditions, no question,” said Ken Cloak, associate vice-president at Colliers international Victoria, and a rental market specialist. “If [all rental housing] that’s in the application process — planned or under construction — were delivered, we’d have 1,600 units.”
But he’s quick to point out that relief is between 12 and 24 months away.
The vacancy rate, by all accounts, remains about 0.6 per cent — a figure offered by Canada Mortgage and Housing Corporation last fall. That rate is expected to improve slightly to 0.8 per cent by the end of this year, but will hit only about one per cent in 2017 as some rental units hit the marketplace.
That’s hardly cause for celebration.
“The slow upward movement in the vacancy rate will only slightly exceed the demand,” confirmed CMHC market analyst Taylor Pardy.
The bleak state of rental affairs resulted in San Francisco-based PadMapper, an online marketplace that links apartment hunters with available units, ranking Victoria as the fourth-worst rental market in Canada in June.
Victoria was behind only Vancouver, Toronto and Calgary on its list of the least-affordable markets for one-bedroom apartments.
The average price for a one-bedroom in Victoria — based on listings on PadMapper and other sites — was $1,075, compared with $1,700 in Vancouver, $1,350 in Toronto and $1,100 in Calgary.
Tanguy Le Louarn, head of data science with PadMapper, said Victoria’s market is so tight that there was little to base their study on.
“Victoria is one of the markets where we have to look at a bit of both [their own listings and those of other sites like Craigslist or Kijiji],” he said.
“The vacancy rate is so low, there’s not much to offer prospective renters.”
Pardy said things should improve slightly, as CMHC has recorded 818 rental unit housing starts through the first six months of this year and there are 1,352 units currently under construction in the region.
“As units complete, it will ease the pressure and bring supply and demand more into balance,” he said.
But Cloak said there are some big-picture challenges the region still faces.
“They are causing more people to come into the rental market,” he said.
Cloak said the market is growing with first-time homebuyers, frustrated by rising prices and a lack of inventory, having to stay in their rental units longer than expected. There is a growing population of younger people moving to Victoria to work in the high-tech sector, seniors are still downsizing and moving to rental in the region and there are three major post-secondary institutions requiring housing.
Victoria Mayor Lisa Helps knows the problem only too well, and the city has developed a 10-year municipal housing strategy to deal with it.
While many of the initiatives are still in the planning phase, Helps said some action has been taken.
She said permits for rental housing are being fast-tracked at city hall. The city is looking at allowing garden suites or micro homes in some areas, and might change the parking requirements for residences.
“There are a number of tools the city is looking at to address the issue,” she said. “They are patchwork, but taken together they will have an impact.”
