Metro Vancouver’s condominium rental market – which involves approximately 69,000 units owned by investors, according to Canada Mortgage and Housing Corp.(CMHC) – is riding out the pandemic well, but tenants are increasingly taking over the driver’s seat.
Only one of 300 tenants renting a condo through Birds Nest Properties – which includes Burnaby landlords - missed paying rent in May and June, for example, according to company director Michael Leung, but he said some clients of his boutique rental agency have trimmed rent to keep tenants in place.
About 12% of Birds Nest tenants, who pay an average rent of $2,200 per month for a condo apartment, applied for the B.C. government’s rental subsidy, Leung said.
The subsidy, unique in Canada, pays $300 per month for a tenant and $500 per month for a tenant with a dependant, and was recently extended to the end of August.
The aid is available to tenants who have suffered at least a 25% drop in income due to COVID-19.
“Things have been going pretty smoothly. We have had only one tenant unable to pay the rent so far and she is making partial payments,” Leung said. “I checked and there has been no increase in late payments during the pandemic compared to a year ago."
All of Birds Nest clients are condo investors who hold one to four rental units in Vancouver, Burnaby or Richmond. While noting that the government’s $300 per month subsidy is not much help to tenants paying more than $2,000 in rent, Leung said it is welcomed.
“I give the B.C. government full credit on the rental subsidy. They delivered it very efficiently."
Birds Nest condo owners have been quick to offer rental assistance to those who don’t qualify for the government subsidy, such as students who do not meet the income -loss qualification, and some have even lowered the rent in an effort to keep a good tenant in place, he said.
“The condo rental market has definitely come off. It is down 10% to 20% [in rents], and we are seeing higher vacancies,” Leung said. About 5% of Birds Nest properties are currently vacant, partially due, he said, to some owners holding out for higher rents.
That could be a mistake, according to a CMHC housing report released June 23.
“Lower immigration and less mobility coupled with an overhang of buildings under construction could lead to vacancy rates increasing in the rental market.” CMHC’s Covid-19 Housing Market Outlook for Metro Vancouver noted, added the softening could be “short-lived” because rental demand is expected to increase post-pandemic.
Pre-pandemic, the vacancy rate for Metro Vancouver rental condos was 0.3%, according to CMHC.
However, half of the tenants surveyed in a June national survey by rental.ca said they would be looking for a more affordable place to rent because of the COVID-19 pandemic. It appears that some tenants will now be testing rent negotiation from the driver’s seat.