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Vancouver high-end house rents plunge up to 20% as inventory spikes


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2018 Oct 20, 12:29pm   2,143 views  15 comments

by Patrick   ➕follow (55)   💰tip   ignore  

https://www.vancourier.com/real-estate/high-end-house-rents-plunge-up-to-20-as-inventory-spikes-experts-1.23470074

“The speculation tax, as well as the collapse in the housing market, is definitely going to affect rental rates in the high-end rental market,” said Vokoun. “A $3 million house that would have rented for $5,000 a year ago will likely rent for around $4,000 a month today. What we’re seeing is that rental rates have decreased up to 20 per cent from the spring of 2017, and it’s getting even worse. And when you look at the ratios, if a person owns a $3 million property, to get $4,000 a month for it probably doesn’t make financial sense for them.”

He added, “It’s getting to the point where there’s some desperation in the market, especially as now these owners also can’t sell these homes. It’s really spiking the rental inventory, in a way that I haven’t seen before in over a decade of property management.”

The spike in high-end rental inventory is “probably around 90 per cent due to owners not being able to sell their home, and 10 per cent due to those who don’t want to pay the speculation tax,” Vokoun assessed.

Comments 1 - 15 of 15        Search these comments

1   lostand confused   2018 Oct 20, 12:44pm  

Patrick says
“A $3 million house that would have rented for $5,000 a year ago will likely rent for around $4,000 a month today. W

Wow, where I live a 300k house can easily rent for 2k+ .
2   BayArea   2018 Oct 20, 2:37pm  

Front page headline of the San Mateo Daily Journal this morning:

“Housing Market is Faltering”
3   BayArea   2018 Oct 20, 3:00pm  

TrumpingTits says
BayArea says
Front page headline of the San Mateo Daily Journal this morning:

“Housing Market is Faltering”


Hahahah. What? Instead of selling their crappy shacks on a full acre lot for $3 million, they will only be able to sell them for $2.5 million then?


That would be a 17% decline and we are nowhere near that. But if we do get there that would be huge! Certainly the difference between owning and not owning for many people.

Nice try at sarcasm though lol
4   Blue   2018 Oct 20, 3:03pm  

Not sure about Canada, but I heard last week on radio "marketwrap with moe", the FED interest rate is still below inflation that means borrowers are still getting subsidy.
5   tatupu70   2018 Oct 20, 3:24pm  

Blue says
Not sure about Canada, but I heard last week on radio "marketwrap with moe", the FED interest rate is still below inflation that means borrowers are still getting subsidy.


Nobody can get a loan from the Fed though. Mortgage rates are always higher than inflation.
6   RWSGFY   2018 Oct 20, 3:28pm  

How the fuck would $5K rent on $3M house pencil out?
7   Blue   2018 Oct 20, 3:39pm  

tatupu70 says
Blue says
Not sure about Canada, but I heard last week on radio "marketwrap with moe", the FED interest rate is still below inflation that means borrowers are still getting subsidy.


Nobody can get a loan from the Fed though. Mortgage rates are always higher than inflation.

Do you mean, the middle man get the cut.
8   tatupu70   2018 Oct 20, 3:44pm  

Blue says

Do you mean, the middle man get the cut.


Not really. Banks don't borrow from the Fed either.
9   mell   2018 Oct 20, 4:04pm  

Happening here in CA as well.
10   Patrick   2018 Oct 20, 4:09pm  

MbS says
How the fuck would $5K rent on $3M house pencil out?


Thank you for asking the obvious question!

The answer is easy: $5K x 12 months = $60K

$60K / $3M = 2%

No landlord can cover a mortgage at such an abysmal return, not even considering property taxes, insurance, repairs etc.

Prices have a lot further to fall to get back to equilibrium with rents.
11   mell   2018 Oct 21, 12:25pm  

TrumpingTits says
tatupu70 says
Banks don't borrow from the Fed either.

Thats funny. Because for years they have been so undercapitalized that is all they've been doing. Borrowing from the Fed used to be a last resort. Not anymore.


Right. They have been borrowing from the Fed forever, the discount window is always open, and they have been borrowing the shit out of the Fed since 2008.
12   Strategist   2018 Oct 21, 12:38pm  

Patrick says
MbS says
How the fuck would $5K rent on $3M house pencil out?


Thank you for asking the obvious question!

The answer is easy: $5K x 12 months = $60K

$60K / $3M = 2%

No landlord can cover a mortgage at such an abysmal return, not even considering property taxes, insurance, repairs etc.


It's no different than buying stocks that pay no dividends. Your expectations are in price appreciation.
13   tatupu70   2018 Oct 21, 4:26pm  

TrumpingTits says
Thats funny. Because for years they have been so undercapitalized that is all they've been doing. Borrowing from the Fed used to be a last resort. Not anymore.


Source? Can you show me all this supposed borrowing from the Fed?
14   tatupu70   2018 Oct 21, 4:27pm  

mell says

Right. They have been borrowing from the Fed forever, the discount window is always open, and they have been borrowing the shit out of the Fed since 2008.


Great--maybe you can show me this borrowing?
15   Strategist   2018 Oct 21, 9:13pm  

tatupu70 says
mell says

Right. They have been borrowing from the Fed forever, the discount window is always open, and they have been borrowing the shit out of the Fed since 2008.


Great--maybe you can show me this borrowing?


That's what the Fed discount window is for. So that the Banks can borrow from the Feds if they have to.

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