Quote:
Originally Posted by EvoFire
Conversation has been pretty light in the last two pages.... Let me try to plunge it back to deep dark discussion 
I've been reading this thread for awhile but had nothing good to contribute, so I just kept reading, however something has been bugging me recently, its about rent. We don't know when the drop is going to happen if it happens at all(I believe it will, its just a matter of time), but when it happens, what is going to happen to rent prices?
Right now housing prices and rent is completely unhinged, partly cause housing prices are retardedly high, but also I think due to the demand for rental units is at a all time low as everyone is buying and no one is renting, pushing rents down.
When the drop happens, rates will go up, people can't refinance, housing prices will drop = a lot of upside-down mortgages and a bunch of defaults. A lot of these people will be forced to rent, increasing demand for rental units.
At the same time there are speculators where if it drops enough, will buy a bunch of these cheap properties and rent them out, bringing up the supply.
So my question is, what do you think will happen to rental prices and units? We are renting a 400sqft ground floor suite right now, thinking of possibly making a move to an apartment rental later next year. Would be be wise to lock up a rental contract at the end of 2014 to guaranty ourselves low rent for the short term(12months)?
My predictions are rents are going to go up at least for 10-12 months as people start to default and get foreclosed. Until housing prices reach the bottom and people start buying again and more rental units show up on the market the rental prices won't start coming down until 18-24 months later. This is based purely on what I can see, and what my economics degree taught me, please do correct me if I'm wrong. |
Rent can only be increase every 12 months and that raise is no more than the specific allowable amount set forth by the Residential Tenancy Branch. Rates for the following year are released every Sept/Oct so you will be able to see what max increase you will receive.
Almost everyone gets a rental increase until an apartment reaches market value. Once an apartment reaches market value the increase will most likely decrease (maybe 5-20$)....it is all subjective.
The rental market in Downtown Vancouver is driven by demand. Everywhere (Burnaby/Coquitlam/NewWest/Surrey/etc) else tends to be around the same (variation of about $100-ish) with an increase the closer you are to the city and/or proximity to transit and age of building. Newer buildings are always more but you can be stuck in a much smaller space.
Example: I have a couple building by HighGate Mall in Burnaby....1960s, hardwood floors, etc but they are well maintained and a 1 bedroom apt is $800 for about 900 square feet. One block away you can rent a brand new condo at $1200 for 450 square feet.
So, you ask will rents go up? crash? Rents will always go up. The rate of increase may slow, but owners can not afford to decrease (significantly) and freezing rates will hurt. There are times I will have units for $850 that are snapped up with a day...other times I need to price drop to $825. Not a big deal...but they won't be dropping to $700.
At least...thats my opinion.