https://www.vancourier.com/real-estate/o...-vancouver-tenants-in-turmoil-1.23518374
Consequences of implementing rent controls and new taxes is that people are withdrawing from the rental market with total rental supply shrinking in 2018 and developers cancelling or converting rental projects.
Quote:
CMHC’s forecast may be optimistic if B.C.’s current leadership proceeds with its plans.
The simplistic logic from many of B.C.’s politicians is that they can force builders and investors to build or buy apartments that they have no chance of making money on.
The province, for example, has struck down a planned 4.5 per cent annual rental increase allowed under its Residential Tenancy Act and will cap the allowable increase at 2.5 per cent in 2019. Yet landlord property taxes, utility rates and insurance costs have been increasing exponentially. BC Hydro rates, as one example, have risen 7.5 per cent since 2016 and will increase 3 per cent next year.
That clattering sound you hear is the downing of hammers at planned new rental projects.
The B.C. government has also brought in a speculation tax and onerous and intrusive regulations on pre-sale condos that will drive away investors – and builders who need pre-sales to secure construction financing. The new rules will further drive down new condo sales, which have already fallen 14 per cent since January, leaving an inventory of nearly 4,500 newly completed and unsold condos clogging the Metro market.
As a result, CMHC forecasts that Metro strata starts will fall 27 per cent over the next two years, reducing the single biggest source of rental apartments and further dashing the slim hopes of rental tenants.
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Unfortunately every policy has its repercussions. That's 16% on average so given that current renters cannot have their rent increase more than inflation it will be new renters that feel the burn. Vancouver's about to get a hell load less affordable. On the bright side, housing is cheaper to purchase, thats what matters [sarcasm].
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