Condos can ease rental squeeze
Vancouver REALTOR® says market is tight
Privately owned condos have become a major source of rental housing in
southern British Columbia, and cities must take action to ensure they
keep coming on stream, a prominent Vancouver REALTOR® has told a
national convention.
REALTOR® Bob Rennie told delegates to the Urban Development Institute
conference that the rental supply is being squeezed because 70 to 100
per cent of the units in condo projects now being built in Vancouver
and Burnaby have already been sold, and there are no plans for many
more new buildings between now and 2010.
To deal with the problem, Rennie said, cities must become more
flexible, approve projects faster, give bonus density to projects that
will create affordable housing and look at unusual ways to create
social housing. “Social housing and non-market housing is in a crisis
situation.”
"We have to find a way to produce non-market housing that attracts
investors to buy into an ethical fund. Buy social housing condominiums
just like we buy a studio and rent it out just like we buy into an
ethical stock fund."
Rennie noted that of 15,000 condo units now being built in Vancouver
and Burnaby, there are few left for sale. In downtown Vancouver, 99.6
per cent of the 2,072 scheduled to be completed this year are sold; 94
per cent of the 2,905 to be finished next year are sold; 72 per cent of
the 2008 stock is sold, and 80 per cent of the 2009 stock is sold.
He told the conference that private investors, who typically buy 30 to
65 per cent of units in any new condo development to rent out, face a
situation of not having anything to buy. "The investor is actually
providing subsidized housing, taking the burden off governments and
placing 35-per-cent down so the rent will cover the mortgage [while
they're] waiting for a capital gain," he said.
"The model of private and public needs being met through development
really is a win-win and we have to start getting creative in every
city."
Rennie noted that condos in downtown Vancouver are now selling at $600
a square foot and rising, because they're selling to an international
market that has no relation to the local economy. That means there
needs to be more development in the rest of the region, he explained.
(CREA 23/05/2006)
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David Valente
www.davidvalente.com
Prudential Sussex Realty
Committed Service. Real Estate Sales.
Valente Real Estate North Vancouver. Real Estate West Vancouver. Real Estate Downtown Vancouver. Real Estate in the Lower Mainland. Buy and Sell Real Estate.