Mortgage Renewal Cliff, New Tenancy Laws, Multiplex Zoning
Sales in Greater Vancouver were down 19.1% in June compared to last year—23.6% below the 10-year seasonal average. Despite sellers bringing more inventory to the market and shifting conditions in favor of buyers, transaction volumes typical for this time of year remain elusive. The total number of properties currently listed for sale is 14,182, a 42% increase compared to June 2023 (9,990), and 20.3% above the 10-year seasonal average (11,790).
Inventory in Greater Vancouver currently stands at around 6 months. Burnaby North, New Westminster, Port Moody, and North Vancouver are slightly more active and competitive, with around 4 months of supply. The number of new listings in June was 3% above the 10-year average, though we likely won't see the same levels in the fall market. Across all property types, the sales-to-active listings ratio is 17.6%; 13.1% for detached, 21.1% for attached, and 20.3% for apartments.
The BoC's 25 bps policy interest rate cut kicked off what is expected to be a gradual cycle of reductions, but it’s not enough to provide the expected relief to the economy. The possibility of another cut this summer is less certain after inflation ticked higher in May, but one bad inflation print doesn't make a trend. A report by WOWA.ca, Canada's largest personal finance encyclopedia, indicated that monthly mortgage renewals would jump 52% over the next 2 years, a ripple effect from the surge during the low rates of 2020/2021.
According to Desjardins, Canadian households are now the third most indebted in the world, and the most indebted of any G7 economy. During the low-rate boom, investors were responsible for most of the borrowing. RBC, the country's largest bank, warned that investors were replacing first-time borrowers in their portfolio. While higher rates and restrictive policy measures are curbing speculation, they are penalizing end users as collateral damage.
Updates to the Residential Tenancy Act
Tenancy laws are about to get even stricter. Effective July 18th, landlords will be required to give 4 months' notice (later updated to 3) when evicting a tenant for personal or caretaker use, giving tenants more time to find a new home. While some landlords need to reclaim their units, evictions initiated under false pretences continue to persist—sometimes under the guise of landlord use, but ultimately so they can rent out the unit to another tenant at a significantly higher rent. There was one instance in North Vancouver where a landlord had to pay the former tenant $46,000, or the equivalent of 12 month's rent, for failing to follow through on having a family member occupy the rental unit. The landlord had planned to move his daughter into the home, but almost a year later, no one had occupied the unit.
The BC Government is also launching a website to protect renters from bad-faith evictions. Landlords will be required to use the Landlord Use Web Portal to generate Notices to End Tenancy for personal occupancy or caretaker use. They will be required to include information about who will be occupying the home on the notice, so tenants can have a better sense of the landlords' intentions which would act as evidence at any dispute hearings for bad faith evictions.
Inventory in Greater Vancouver currently stands at around 6 months. Burnaby North, New Westminster, Port Moody, and North Vancouver are slightly more active and competitive, with around 4 months of supply. The number of new listings in June was 3% above the 10-year average, though we likely won't see the same levels in the fall market. Across all property types, the sales-to-active listings ratio is 17.6%; 13.1% for detached, 21.1% for attached, and 20.3% for apartments.
The BoC's 25 bps policy interest rate cut kicked off what is expected to be a gradual cycle of reductions, but it’s not enough to provide the expected relief to the economy. The possibility of another cut this summer is less certain after inflation ticked higher in May, but one bad inflation print doesn't make a trend. A report by WOWA.ca, Canada's largest personal finance encyclopedia, indicated that monthly mortgage renewals would jump 52% over the next 2 years, a ripple effect from the surge during the low rates of 2020/2021.
According to Desjardins, Canadian households are now the third most indebted in the world, and the most indebted of any G7 economy. During the low-rate boom, investors were responsible for most of the borrowing. RBC, the country's largest bank, warned that investors were replacing first-time borrowers in their portfolio. While higher rates and restrictive policy measures are curbing speculation, they are penalizing end users as collateral damage.
Updates to the Residential Tenancy Act
Tenancy laws are about to get even stricter. Effective July 18th, landlords will be required to give 4 months' notice (later updated to 3) when evicting a tenant for personal or caretaker use, giving tenants more time to find a new home. While some landlords need to reclaim their units, evictions initiated under false pretences continue to persist—sometimes under the guise of landlord use, but ultimately so they can rent out the unit to another tenant at a significantly higher rent. There was one instance in North Vancouver where a landlord had to pay the former tenant $46,000, or the equivalent of 12 month's rent, for failing to follow through on having a family member occupy the rental unit. The landlord had planned to move his daughter into the home, but almost a year later, no one had occupied the unit.
The BC Government is also launching a website to protect renters from bad-faith evictions. Landlords will be required to use the Landlord Use Web Portal to generate Notices to End Tenancy for personal occupancy or caretaker use. They will be required to include information about who will be occupying the home on the notice, so tenants can have a better sense of the landlords' intentions which would act as evidence at any dispute hearings for bad faith evictions.
- Increase notice from 2 to 4 months.
- Increase the amount of time the landlord must occupy the rental unit from 6 to 12 months.
- Increase the time a tenant has to dispute notice from 15 to 30 days.