Nanaimo’s rental market could well be described as high and dry.
As of October, according to Canada Mortgage and Housing Corporation statistics compiled through a survey of property owners, Nanaimo’s vacancy rate for townhouses and apartments, including one-, two- and three-bedroom and bachelor suites, tumbled to 1.7 per cent, following a 2.2-per cent vacancy rate charted in Oct. 2015. The figures show a steady decline. Spring 2013 vacancy rates stood at 8.3 per cent, but dove to 5.3 per cent by April 2014.
“Average rents have increased in every category across accommodation types. We’re also seeing overall vacancy rates decreasing in every single category as well,” said Amrit Manhas, Nanaimo Economic Development Corporation interim CEO.
Nanaimo’s average monthly rent rose about 4.3 per cent last year to $828. Broken down by location and suite type, average rents range from $573 for a bachelor suite in south Nanaimo to $1,264 for a three-bedroom unit in the north end.
Nanaimo currently has 3,843 units, 93 more than in October 2015 and more are coming online.
“Over the years we’re starting to see more purpose-built accommodations to try to respond to the demand that is in the marketplace,” she said. “When you start seeing these rental rates are going up over the years and vacancy rates are dropping, it’s a signal to investors that the return on this investment is more competitive with other forms of investment, hence you’re going to see more purpose-built product that is going to be coming in to the market.”
Dale Lindsay, city director of community development, said rental construction in central Nanaimo and the Country Club areas will add another 266 rental suites.
“In addition to purpose-built rentals, we’re continuing to see strong demand for secondary suites in our new home construction,” Lindsay said. “In 2016 we built 329 new homes in the community – single family – and 186 of those had secondary suites.”
More than 1,500 secondary suites have been created in Nanaimo since they were legalized in 2005.
Pressure for more rental housing will come from growing numbers of families unable to qualify for mortgages and immigration. Nanaimo now captures about six per cent of all migration from within and to the province.
“It’s not just that historic, kind of, birth and death and you average out a population projection,” Lindsay said. “The growth on the Island is going to be largely dependent on the story about migration, both inside the province and outside the province.”
The provincial vacancy rate now stands at 1.3 per cent with Kamloops, Kelowna, Abbotsford-Mission, Victoria and Vancouver showing rates ranging as low as 0.5 per cent; Parksville, 1.4 per cent; Squamish has zero vacancy.