Report: Nelson’s rental vacancy rate is 0.7 per cent

The overall vacancy rate for the province is 1.3 per cent, up from 1.2 per cent in 2015.

The overall vacancy rate for the province is 1.3 per cent

The rental vacancy rate in Nelson was 0.7 per cent in October, according to a new report by the Central Mortgage and Housing Corporation (CMHC). This is up from 0.4 last year.

The overall vacancy rate for the province is 1.3 per cent, up from 1.2 per cent in October, 2015.

A vacancy rate of one per cent would mean that at any given time there would be one vacancy per 100 units.

The report breaks the numbers down into different types of rentals. For three-bedroom units, there are no numbers because there are too few three-bedroom units available in Nelson to do a calculation. For two bedroom units the rate is 0.8, for one bedroom it’s zero, and for bachelor apartments CMHC simply designates the number as “unreliable.”

The average Nelson rent is $770, up from $739 last year a four per cent increase. The average for bachelor apartments in 2015 was $572, and $605 in 2016. For one-bedroom units, $684 in 2015 and $714 in 2016; two-bedrooms increased from $830 to $890; and for three-bedrooms there were not enough units to supply any data.

The average rent for the province is $1,099: 43 per cent higher than in Nelson and up from $1,035 in 2015.

The number of units available to rent in Nelson declined by two per cent, from 507 to 496.

However, there is one irregularity in these numbers that should be noted. CMHC’s figures cover apartments, suites, and townhouses, but not rentals of entire houses and not suites in buildings with fewer than four rental units. The numbers pertain to apartment buildings.

But Nelson realtor and landlord association president Trevor Jenkinson says he doesn’t think that skews the numbers very much, and that the vacancy rate would be about the same even if spaces such as basement suites were included.

The report says rental demand increased in 2016 across most of B.C. for a number of reasons.

Employment opportunities have improved among the younger segment of the population who tend to rent. “The unemployment rate for this group declined to 10 per cent in September compared to 14.9 per cent a year earlier,” the report states.

Also, house prices have gone up, there are fewer real estate listings, and fewer new home completions compared to the rate of new household formation, the report says.

“Competition among home buyers for entry level housing in the resale market, and a lack of new homes for sale, were also factors at play in the housing decision of some renter households looking to get into home ownership. As well, some first-time home buyers stayed in rental accommodation longer to save for a larger down payment. The inventory of new and unsold homes in BC reached record lows in 2016.”

Migration into the province from other provinces and internationally has increased, and according to the report this could trickle down from the big cities to places like Nelson, creating more rental demand.

Jenkinson says the number of rental units in Nelson has decreased.

“There have been limited additions to the rental housing supply. Purpose-build rentals just do not exist here, and there has been some removal from the rental market for various reasons: some houses have sold, some have decided to stop being landlords, and there is the Airbnb thing.”

He said some landlords have decided to stop long-term renting and go with short-term rentals instead because of bad experiences with tenants.

CMHC’s statements about migration apply to Nelson, according to Jenkinson, who says that from his vantage point as a realtor he sees new people arriving and current residents not leaving.

Ann Harvey of the Nelson Committee on Homelessness says her group’s annual reports on homelessness have predicted many of the points in the CMHC report.

“Anyone who has been in the housing business for a decade or so has seen this coming,” she said. “There has been no investment either by the private or public sectors in rental housing for decades, almost 25 years.

“You can’t fault the private sector. They need to make money and it is a quick in-out if you build for home ownership. There has to be some incentive for them. They could not build rentals and make a profit. So where does the responsibility then lie?”

 

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