Deep Cove Homes and the rental market.
As you can see from the very few listings that show up on this website, very few places are available for purchase in Deep Cove. The rental market here is just as tight…it is very hard to find rental suites in the Cove and it doesn’t look like that situation will get any better. Today in the Business section of the Sun there was an article which sounds a bit scary for renters….
I have a client who has been looking to buy rental apartments and it is clear that investors will pay big bucks for this type of property. However, apparently they won’t pay to build it. Although Vancouver rents are very high, after land costs and building costs are factored in it is not economically advantageous to build rental accommodation. According to an article in today’s Vancouver Sun Business section, even Vancouver based developers are looking to other areas to build rentals. Surprisingly, Toronto works much better for this kind of endeavor. Apparently in Vancouver for an investor to build a rental building they are looking at a price per square foot for land of around $100 per square foot and about $250-$260 per square foot to build. The rents charged work out to only about $2 per square foot. In Toronto , the price per square foot of land is $30-$35 and the building costs are $150-$155 per square foot…..so the costs are significantly lower but Toronto rents are a lot higher at $2.10 to $2.25 per square foot. Apparently rents in Vancouver would need to go to $3 per square foot to make these investments in construction viable. The article quotes Dave Goodman of Macdonald Realty as saying that the rents are expected to catch up in Vancouver….but until then, City Council needs to plan to prevent a crisis in the rental market and is considering a moratorium on the demolition of rental properties. Personally, I think rents in Vancouver are very high although according to Goodman they have only increased 21% in the past decade whereas the price to purchase has more than doubled in that time. Regardless, given the current interest rates, I still think it makes more sense to buy than pay someone else’s mortgage for them! And while it may take time to find a home to buy in the Cove, I think it is worth the wait…..