Falling vacancy rates push up rents across B.C.

The price of real estate may be dropping, but it is still getting harder and more expensive to find a rental apartment in Vancouver and much of B.C.

The Canada Mortgage and Housing Corporation's 2008 Fall Rental Market Survey found the vacancy rate for rental apartments in the city slipped to 0.5 per cent this year from 0.7 per cent last year.

Overall, B.C.'s vacancy rate for rental apartments remained steady at one per cent,

But across the province, increases in vacancy rates in towns such as Campbell River, Port Alberni and Prince George, which have been hit by slowdowns in the forestry industry, were offset by rapidly shrinking vacancy rates in towns such as Dawson Creek, Kitimat, Prince Rupert and Terrace, which yet to experience a slowdown.

Jobs and new residents shorten supply

The low vacancy rates pushed rents higher, with an average rent for a two-bedroom apartment in B.C. jumping 5.3 per cent compared to 2007, about double the general rate of inflation.

The report did not include actual average rental rates, but a CMHC study last year put the average rental rate for a two-bedroom apartment in Vancouver at $1084, second only to Calgary at $1089.

This year's study found rents rose 4.5 per cent in Vancouver, putting the average rate at $1,133.

Robyn Adamache, a senior market analyst with the CMHC, said there are several factors driving demand in the province, in spite of the economic turmoil gripping the world.

"Job growth and a steady inflow of new residents to the region are keeping demand for rental housing robust. Although the pace of job growth has slowed somewhat from last year, the unemployment rate remains near record lows," said Adamache.

"The large gap between the cost of home ownership and renting in the region is also causing some people to stay in rental housing."