“What I don’t get is that my friend pays less for rent in Vancouver than I do in Calgary. I don’t know if Vancouver landlords are just more understanding and generous or if the market isn’t that tight for renters.”

“What I don’t get is that my friend pays less for rent in Vancouver than I do in Calgary (And I also paid less when I lived there) for something relatively similar. Most of these houses look like those that have basement suites. Even if you bought before the boom (2002-ish), the house is still around 500-600k. But now that it’s worth 800k, the property taxes should be enormous, add in the costlier utilities and sewage/garbage/recycling fees and I don’t know if Vancouver landlords are just more understanding and generous or if the market isn’t that tight for renters.”relationship_tom at reddit.com 15 July 2011

“It’s most certainly a renters market. I live in Van and renting is so much more affordable it’s insane. My dad just bought an apartment in Arizona for 80k and is renting it for $900 a month. A similar place here would be 500k but only rent for $1800.”jsbell_69 15 July 2011

[Comments above from a discussion thread regarding Vancouver Sun article, ’20 ‘average’ homes in Vancouver priced around $810,000′]

7 responses to ““What I don’t get is that my friend pays less for rent in Vancouver than I do in Calgary. I don’t know if Vancouver landlords are just more understanding and generous or if the market isn’t that tight for renters.”

  1. “the property taxes should be enormous”

    This person doesn’t understand that property taxes in Vancouver are NOT function of the “value” of your house. They are a function how much money the city needs, and the ratio between the “value” of your house vs everybody else’s house. In other words, the property taxes are “scale free”: if everybody’s house value went up by a factor of exactly 10, nobody’s property tax would change.

    Such a setup is extremely useful during a property bubble. If property taxes actually went up as prices increased, some owners would start to be unhappy with the increase in their tax bill. But, since the taxes are scale free, as the bubble grows, no one feels a pinch from the tax man.

    Vancouver property taxes are quite cheap compared to many other places in Canada.

  2. The effect seems to be concentrated in the centre core of the city; multi-unit dwellings in say Kerrisdale have atrocious cap rates, Surrey not so much. Part of the difference is due to increased tenant quality but not totally. There is a “premium” for having the investment close to where the owner can manage it.

    So yes yields in Vancouver are atrocious, but Vancouver isn’t the only city on the planet with bad yields. There are both some legitimate and illogical reasons for it. Good for renters? You bet.

  3. ‘Nemesis’ renewed last month @ TheFortress’O Solitude… TheLandLord didn’t even hint… nay, nary even the most tepid of ‘murmurs’ viz. increases… altogether judicious behaviour, when you allow that that so many other tenants in the Fortress are playing musical ‘suites’ courtesy of a burgeoning new crop of unintended landlords in, and this makes for a refreshing change, a rent ‘race to the bottom’ to secure quality tenants/stave off foreclosure on their ill-considered RecSpecs…

    In other news, the GoodNeighbour from the Sheikdom of ElBerTa recently concluded their annual visitation/habitation… Duration 1 Week. Who lurking here, based on occupancy of just one week per annum, would tie up 1 BigOne of their [presumably] hard earned loot for the convenience of familiar bed linens/furnishings/cutlery?… It simply boggles, don’t it?

  4. Vancouver RE is not an investment – it’s viewed by the Chinese as a bank / store of wealth – like gold. Returns can be minimal or even negative for Vancouver RE if it has positive hedge value particularly for foreign investors who need to get their money (clean and dirty in many cases) out of their home countries for fear of confiscation. Negative Vancouver RE returns work as well for HAM when claimed as a loss against income from some other venture within a holding company to reduce tax paid especially if the RE is 100% cash financed. This is one of the reasons you will find relatively low Vancouver RE holdings in domestic REITs as returns become signicantly negative if leverage (mortgage financing) is employed.

    Rental rates are determined by supply and demand and are a function of income levels. Vancouver has a much higher “shadow” vacancy rate and also lower income levels per household than Calgary so rental rates are similar. The main resulting difference being that it’s actually cheaper to own in Calgary while it’s much cheaper to rent in Vancouver.

    Just ask Rusty and then believe the exact opposite since he has a significant vested interest in wanting people to believe that Vancouver RE remains a good investment because future capital appreciation will alway bail you out of massive debt financing.

    • “claimed as a loss against income from some other venture within a holding company”

      I’ve heard of this trick, though I’ve heard a lot more about it than I’ve seen it. There is some irony there, where some of the well-heeled successfully advocated for significant tax shifts in the past 10 years, but throw their hands skyward when others start using the same tricks but with larger magnitudes, pricing out hard-working local bourgeoisie offspring.

      Nonetheless, the more we peel the onion, we will probably find out we were peeling the wrong onion. How many rich foreigners from China again? A small number multiplied by a big number. Right-o.

      • Not that I’ve seen this first hand either but this fact was explained to me by a real estate para-legal that just moved from Vancouver.

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