Vancouver Housing Trends — Overview

• In Vancouver, the homeownership rate stood at 64% in 2018, 4% less than the national average (68%).
• The percentage of house renters is rising as homeownership continues to get out of reach of many Canadians living in Vancouver.
• This trend is partly due to Vancouver's high value-to-income ratio (9.1). This ratio reflects the relationship between property values and average income. The higher the value, the higher the property values.
• The rule of thumb is that the value-to-income ratio should not be more than 4. Any figure above four reflects unaffordability.
• According to a March 2019 survey, 45% of renters in Vancouver are aged between 25 and 34, while 19% are between 35 and 44.
• According to the survey, females are renting more than males — 56% to 44% respectively.
• The decision to rent furnished or unfurnished is a "value assumption equation." The average rent for a one-bedroom unfurnished apartment in March 2019 was $1,682 per month. For a similar but furnished apartment, the average rent was $1,930 per month.
•  Surrey appears to have the lowest rental figures in Vancouver ($1,371 per month for a 1-bedroom apartment). Downtown Vancouver is the most expensive ($2,076 per month for a 1-bedroom apartment).

Vancouver Rental Data

• In Vancouver city, 53% of households rent compared to the Metro Vancouver area where 36% of households rent. This implies 47% of the city houses are owned compared to 64% in the larger Metro Vancouver region.
• The majority of renter households are couples without kids (29,680), while households with kids were 13,930. The estimated number of households with children is 30%.
• The number of renter households stood at 591,550.
• Moreover, the median income for a renter household was $45,979, while the average renter household income was $58,698.
• The average renter income for a 'couple with kids' household was $105,450, while 'couple without kids' households was $94,098.

Population & Income Distribution in Vancouver

• The 25 – 29 age bracket comprises the largest population age bracket in Vancouver. The 30 – 34 age group follows it.
• The least populated age bracket is 80 – 84 years. Seventy-four percent of the population belongs to the working class (15 – 64 years).
• Most of Vancouver's residents live above the low-income cut-off. This means they earn above the 2016 national annual median income ($65,327).

• A 2016 social profile report showed income distribution in Vancouver among four main age groups, i.e., < 24 years, 25 – 44 years, 45 – 64 years, and > 65.
• It revealed that 41% of persons < 25 years were in the bottom 30% of Canada-wide income, 32% in the middle 40% of Canada-wide income, and 35% in the top 30% of Canada-wide income.
• For persons between 25 – 44 years, 30% were in the bottom 30% of Canada-wide income, 35% in the middle 40% of Canada-wide income, and 35% in the top 30% of Canada-wide income.
• For individuals aged 45 – 64 years, 31% were in the bottom 30% of Canada-wide income, 32% were in the middle 40% of Canada-wide income, while 37% were in the top 30% of the country's highest income.

Homeowners

• According to the 2016 Census data, homeownership in British Columbia (which contains Vancouver) was more concentrated among the older population.
• The median age of a homeowner was 55 years old, while that of individuals who did not own homes was 37 years old.
• A 2011 Homeownership profile in the Greater Vancouver area showed that most homeowners were over 44 years old.  
• Today, owning a home in Vancouver is much harder than it was a decade ago, with statistics indicating that only 7% of Vancouver families can afford homeownership.
• According to the real estate website Zoocasa, a prospective homeowner in Vancouver should earn roughly $205,475 annually. This puts them in the top 2.5% highest earners in the country.
• The current benchmark price for a single-family dwelling is $1.441 million.  
• Condominiums that were typically regarded as entry-level housing for first-time homeowners go for $656,900, well out of reach for most Vancouverites earning anything less than $93,527.
• According to the 2016 Census, the median household income is $65,327 per year.

Income distribution by age

• 16 – 24 years — average income is $16,100, median income is $12,000
• 25 – 34 years — average income is $45,000, median income is $40,300
• 35 – 44 years — average income is $62,500, median income is $50,600
• 45 – 54 years — average income is $63,600, median income is $53,700
• 55 – 64 years — average income is $57,700, median income is $44,700
• 65+ years — average income is $45,300, median income is $32,500

Homeownership and Renters by age group

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• Recent trends (2016 onward) show that homeownership is skewed toward high-income earners (people earning at least $100,000).

• From the income distribution trend in Vancouver, top income earners are likely to be in the 35 – 39 and up to the 45 – 54 age brackets with an income of at least $93,527.
• Renters are likely to fall in the 25 – 34 age group and have an average income of $45,000.
• Going by data obtained from Statistics Canada, 43.5% of persons between 20 and 34 own homes, fewer than the 2011 averages.
• However, 79% of homeowners are 65 years and above.

Property 1: Luxury Rental, Private Residences at Hotel Georgia

Overview:

• The Private Residences at Hotel Georgia are part of a recently renovated historic hotel in downtown Vancouver. The building is Vancouver’s second tallest skyscraper, and offers modern luxury living in a historic setting. The residences provide access to all the amenities of the hotel, including: a luxury indoor salt water lap pool with a glass bottom, a fitness studio, a yoga studio, an art deco themed lounge with historic features intact, an award-winning restaurant, and a prohibition era themed jazz bar. The hotel also offers maid service and 24-hour concierge service.  
• The hotel was built in the 1920s, and has hosted famous guests ranging from Elvis to Queen Elizabeth II. The renovated hotel has kept many of its historic features in the public areas, but it also has brought in new draws such as a huge modern art collection. The personal rooms are modern, but fit in with the overall design of the building.

•  Trip Advisor ranks the hotel at number 13, out of 88 Vancouver hotels. The hotel is also named as Best of the Best by Travelor's Choice.
• The building won the 2014 Vancouver Sun Readers’ Choice Award for best residential high rise, and also the 2012 Georgie Award for best innovative features.

Cost

• Furnished: 1-3 months lease, $10k /month; 4-6 month lease, $9.5k /month; 7-12 month lease $9k/month

• Unfurnished unit : 1 year minimum leases, $8.5k/month

Individual Units Features

•  Both furnished and unfurnished units are available. Furnished units offer flexible lease terms at a higher cost. Unfurnished units are available with a standard 1-year lease.
• The units are a spacious 1,459 square feet, with 2 beds and 2 baths.
• The units offer 2 complimentary garage parking spaces, or for an additional cost of $250/month, valet parking is available.
• Units are upscale and feature custom oak cabinetry, polished quartz counter tops, marble floors, and top of the line appliances. All the materials and finishes were selected by Mitchell Freedland, one of Vancouver’s premier interior designers.

Sustainability

• The blinds are motorized and operated by photo-voltaic cells, the units have geothermal heat, and low flow water fixtures. A recycling and composting system is used to take care of trash, and there are individual gas meters in every unit so that residents can monitor their energy consumption.

Convenience

• The building is close to public transit. It is within walking distance of many corporate headquarter offices, major law firms, brokers, and banks, as well as the Vancouver Board of Trade.

Property 2: Mid-Range Rental, TV Towers

Overview:

• The TV Towers are 2 buildings of unfurnished apartments adjacent to, and sharing a lot with, the Canadian Broadcasting Corporation. They were completed in 2009. They are located in downtown Vancouver, and they were designed to fit in with the existing architecture of the area. The building is 26 stories tall, and there are 825 units between the 2 buildings.
•  Building amenities include a guest suite, gym, hot tub, sauna, steam room, meeting room, amenity room, concierge, and bike storage.

Cost

• The average rent for a 2 bedroom apartment in Vancouver is $2,194/month.
• A 2 bedroom at TV towers is slightly above this average, at $2,500/month. TV Towers has a 1-year term minimum.  

Individual Units Features

• A 2 bedroom apartment is 874 square feet and has 2 bedrooms and 1 bathroom. The apartments offer balcony views, floor to ceiling windows, carpeted floors, particle wood or optional upgraded granite counter tops, and stainless steel appliances. Floors are laminate, and tiled in the bathroom. There are 2 pre-designed color schemes. Garage parking is provided.

Sustainability

• The apartments do not have the sustainability emphasis of many other Vancouver properties. There is no mention of sustainable building materials or LEED certification. The units do come with low energy appliances and fixtures, and double-glazed glass for improved insulation and heat management.

Convenience

• The buildings are located in downtown Vancouver near the art gallery and public library. There is also sports, shopping, and nightlife nearby. Key bus routes and other transit options are within walking distance.

Takeaways

Space

• Especially in a downtown area, space seems to be a premium feature to apartment buyers. The luxury apartments were substantially larger than the more mid-priced units. A two bedroom premium unit was 1459 sq ft, compared to 874 sq ft for a mid-priced unit.

History

• Renters appear to be willing to pay a premium to live in buildings with unique historical backgrounds. The units adjacent to the historic hotel site were around 4 times the price of the units in a modern building with no such history.

Luxury

• The premium units featured appliances and furnishings made of higher-quality materials. For example, the luxury units had marble floors instead of laminate. The counter tops were quartz, not particle board. Also, the luxury units featured motorized blinds that generated their own power.
• The common areas were also nicer for the luxury units. The common areas of the premium units are filled with works by famous modern artists. Both buildings had pools, but the luxury building featured a salt water pool with a glass bottom that had won awards. The luxury units also had award-winning dining available inside the building, while the residents of the mid-level building have dining available nearby, but not onsite.

Convenience

• Both groups of residents had many services available to them at the building, but the luxury units had extended offerings, including maid service, valet and laundry services, and 24-hour in-room dining service.
• Both buildings are conveniently located in downtown Vancouver near many amenities, but the luxury units have a restaurant and bar available inside the building.

Sustainability

• The luxury units featured many more environmentally friendly features, and also provided residents the opportunity to actively participate in sustainable living with in-unit gas meters. Both buildings offered energy efficient appliances, but the luxury units also offered blinds with their own sustainable power sources.

Research Methods

Rental Factors Driving A Price Premium: Basic

Demand

• Demand is a significant factor in determining rent in Vancouver.
• Due to high demand, prospective tenants are charged higher than long-term tenants. The mean of these fees is about 20.8% higher than the average rent for already occupied units.
• Thanks to the difference in rent for new tenants, long term tenants are less inclined to change houses, and the turnover rate was last reported to be 13.6%.
• Up to 49% of the survey respondents noted they had no plans to move within one year.



Incentive Programs

• The incentive programs in Vancouver resulted in the approval of 8,680 new rental units.
• Such incentives include unit size relaxation (to 320 sq. ft.), DCL waiver, parking reductions, density increases, expedited and concurrent permit processing.
• About 66% of survey respondents are in favor of providing incentives to developers.
• Unfortunately, the incentive programs also increase the cost of the rent. "The housing constructed through the incentive programs has been critiqued because of high rents of completed projects."
• Although the incentive programs are designed to enhance the new market rental supply and eventually lead to more choice houses, affordability is not a significant consideration in some programs.
• All the same, the programs are expected to reduce the pressure on the old stock of rental housing units.

Rental Factors Driving A Price Premium: Valuable Differentiators

Condominiums and Type of Houses

• A report shows that due to demand, the vacancy rate of primary rental apartments is 1.1% and that of rental condominium apartments 0.3%. Financial analysis by the Rental Incentive Program Review by Coriolis Consulting shows that condominium development will out-compete rental use.
• The number of condominium apartments increased by 18.9% after the City of Vancouver witnessed immense gains from 5,920 units of rented condos.
• Over 9% of respondents believe there is a need for more condominium and strata housing in Vancouver. Many see condominiums as an entry point into homeownership. Due to the increased cost of condos, residents "call for ways to incentivize affordable condominium options."
• Reports show that condos and certain house types witness increased rent due to demand. "Affordability pressures in this segment of the market have caused first-time buyers to instead look for rental housing, or homes in the strata condominium and townhouse market, which has contributed to limited vacancy rates, and has increased demand and the price for those types of homes accordingly."

Rental Factors For Home Choice: Basic Needs

Affordability

• In general, 79% of renters are interested in the affordability of houses.
• Renters are concerned about the rent-geared-to-income model's validity that ensures renters do not spend more than 30% of their income on housing costs.
• Of the respondents, 69% are of the opinion that the city should permit even taller buildings that can accommodate more people at a much lower rate.



Location

• Respondents of a renter survey reported that five crucial factors influencing their home choices were affordability, proximity to public transport, proximity to their jobs, pet friendliness, and the neighborhood in general. In contrast, critical reasons for changing houses were the desire for broader living space, relocation, rent increments, job change, the desire to change neighborhoods, and maintenance issues.
• Most of these factors can be summarized as another major rental factor, location.
• Out of the respondents, 46% said they did not "feel connected to their community or neighborhood where their rental home is located."
• A total of 87% of respondents are interested in affordable housing within walking distance of good public transport, 65% desire houses in a commercial street, 67% close to parks and community centers, and only 3% of renters have no particular interest in the location of homes.
• Statistics show that the desirability of certain locations like Metro Vancouver has resulted in increased rent in such locations.

Rental Factors For Home Choice: Desirable

• The factors considered desirable include senior housing and assisted living suites, size considerations, and pet-friendliness.
• Only 4% of respondents to a survey declared the need for senior housing and assisted living suites, and 18% were concerned about the inadequate unit size or layout.
• Many respondents to a survey indicated that they were open to higher rent to live in a pet-friendly building.
•  Seventy-six percent of renters consider amenity spaces necessary.