Amid Vancouver’s inflamed housing costs and rental rates, a comprehensive analysis by UBC-trained data scientist Louie Dinh pointed at a tantalizing possibility: the city’s rents might be moving downward.
Dinh has studied Vancouver’s rental rates via thousands of Craigslist entries since 2016, and said that July 2018 represented the first time that rents have decreased since he began his tracking, with rates for one-bedroom units falling by 2.7% month-over-month and those for two-bedroom units declining by 3.2%. In the same time frame, rates for three-bedroom units dropped by 5.3%.
“This is the first time we have actually seen a price drop in a long time, so hopefully [it] continues,” Dinh told CBC News.
He assured that the analysis carefully curated the data so that outliers such as overpriced units do not misrepresent the median rates, although he cautioned that it’s still too early to call the shrinkage a trend.
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Dinh stated that it has proven difficult to pinpoint the cause of this development due to recent regulatory changes and taxes implemented to moderate Vancouver’s red-hot market. He raised the possibility that sluggish property sales might be pushing speculators towards renting out their properties out instead of selling these.
“Last month, condo sales dropped 30% to match 2012 lows, and detached homes haven’t seen this sort of sales drought since 1991,” he wrote in his blog. “Recent buyers will likely sit back and rent for the next few years of 0% growth rather than sell at a loss.”
Dinh added that the rental rate declined he observed came in the wake of an increase in Craigslist entries this year, with over 5,500 units listed each month (compared to the 4,500 units during the same time last year).
“Volumes had been increasing for quite a few months, but prices were really sticky,” Dinh said. “Now we are starting to see landlords are pulling back a little bit and saying, ‘Hey, I gotta drop my prices so I can move my unit.’”
Ephraim is currently a journalist at Mortgage Broker News, Real Estate Professional and Canadian Real Estate Wealth.
Ephraim is a highly accomplished news reporter whose work has been published across North America and the Asia Pacific region. Before joining Key Media, Ephraim spent eight years working as a journalist with Reuters TV. His areas of expertise include real estate, mortgage, and finance.
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