Transit-oriented turnover
To everything there is a season, and according to a Canada Mortgage and Housing Corp. (CMHC) study of the Vancouver market, the top three reasons why tenants move are when they buy a home, change jobs or find new lodgings where the rents are lower and the digs or the management’s better.

But being able to track those seasons in a tenant’s life is key for landlords, and the CMHC study aims to give landlords some clues as to what’s likely in their area.

Outside of the University Endowment Lands, where tenant turnover is a whopping 48.3%, the areas with the most footloose tenants include Surrey (27.4%), Richmond (24.9%), downtown Vancouver (22.9%) and North Burnaby (22.8%).

Combined with the proximity of these areas to post-secondary institutions such as Simon Fraser University, the British Columbia Institute of Technology and Kwantlen Polytechnic University, the presence of rapid transit connections suggests why these sub-markets have a more transitory tenant base.

The three most stable areas are southeast Vancouver (8.2%) and North Vancouver district and West Vancouver (tied at 12.1%). The only other areas with turnover rates of less than 15% are East Hastings (13.8%) and Vancouver’s west side (14.8%), neither of which has rapid transit services. Common to these areas is a lack of rapid transit connections, even considering the west side’s proximity to the University of British Columbia.

Rate growth
Corporate housing, that hybrid of hospitality and rental businesses, reflected conditions of both sectors in its performance last year, according to a review of 2015 numbers by the Corporate Housing Providers Association (CHPA) of Indianapolis.

Strong growth in rates and steady occupancies combined to boost the supply of units surveyed to 508 – that’s up from a sample of 296 units last year, when the total inventory in the Vancouver market was pegged at 1,759 units.

This doesn’t necessarily mean trouble, however; the market fundamentals presented in the report indicate healthy conditions. Those seeking trouble should look to Calgary, which CHPA singled out as a market facing difficulties thanks to oil and gas sector challenges.

Buy side
The strength of purpose-built rental properties and demand for corporate housing is paralleled in investors’ appetite for multi-family properties.

Developers are showing increased interest in building and holding on to units for the cash flow they provide, while investors bought multi-family properties in record numbers last year.

The forecasts of David and Mark Goodman for 2015 came true as Greater Vancouver sales bust through the $1.5 billion mark to approach a total of $1.6 billion – a 99% increase over 2014 volumes.

Just last week, Avison Young’s analysis logged 80 transactions provincewide worth more than $5 million. The total of those deals topped $1.4 billion.

Defining elements of the transactions, as noted by both the Goodmans and Avison Young, include a large number of private owners “realizing spectacular gains” (the Goodmans’ words) through sales to buyers backed by foreign – most commonly Chinese – capital.

“The number of larger deals completed by foreign buyers (greater than $10 million) is on the rise and, as a result, the profile of such purchasers has also grown despite their presence in the market for some time,” Avison Young said in its report. “More foreign investors are expected to arrive in Metro Vancouver in 2016 and 2017.” •

Tenant Turnover Most Likely in Transit-Oriented Rental Markets by Peter Mitham | Business in Vancouver