Last Updated on October 24, 2023 by Ephraim Vecina
Foreign students, downsizing seniors, and tech industry workers are all fuelling sustained demand for BC’s rental real estate – and this should give developers a clear idea as to how they should proceed in their future projects, a markets researcher argued.
In a recent study, Urban Analytics Inc. principal of market research Michael Ferreira argued that around 30,000 units need to be delivered in the next two years alone to fulfill the demand in BC.
International students might need anywhere from 10,000 to 20,000 units, while downsizing senior Canadians are estimated to require around 38,000 units.
Furthermore, the flourishing tech industry is expected to magnetize even more potential tenants, which would require additional construction of up to 15,000 units on top of existing and projected delivery.
“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?”
The trend would prove particularly lucrative for tenants. Statistics Canada data indicated that BC and Ontario are home to a large contingent of property investors – and many of them have chosen to rent out their residential assets.
“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 these.
Meanwhile, the volume in Ontario last year was 835,175, with around 43% (359,475 owners) in Toronto alone.
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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