Rents in B.C. are down – a total of 14.4 per cent decline in average asking rents for purpose-built apartments over the last three years.
The reductions have been less dramatic in some other areas, including the rental of entire houses or condo units, but just about every category of rental housing, and most regions of the province, are seeing broad-based, sustained declines.
This is a good news story, but it’s one we have to be cautious about.
On the demand side, rents are going down because there are just fewer people. British Columbia’s population dropped last year thanks to lower immigration and fewer temporary foreign workers and students.
On the supply side, we’ve been seeing more purpose-built apartments going up for the past several years, and those began hitting the market in a big way in 2024 and 2025. Some developers have switched from building condos to rental apartments as the “investor” market has dried up.
This is economics 101 – if supply increases and/or demand drops, prices will decline.
Now we just have to keep this trend going, and that may be tricky.
Population decline won’t continue indefinitely – the population will start to rise again, most likely in 2027 or 2028, albeit at a slower pace.
And as for supply, that may run into some real problems, and fairly soon.
Builders are suffering from the impacts of inflation and high prices of materials, labour, taxes and fees, and land. Rent is cheaper, housing prices are dropping, but the cost of actually building a two-bedroom apartment isn’t coming down at the same rate. Many of our developers – and their financial backers – no longer remember the era in which housing could be built without being partially funded by pre-selling units, for example.
As in real estate, there will be calls to “rescue” developers by going back to the status quo. That means ever-increasing rents to support ever-increasing building costs.
We need to chart a new path, and that means figuring out how to build cheaper housing.
Some of that is going to mean technological change, like using modular, factory built components, even if that results in boring-looking (but cheap!) housing.
Some of it will be regulatory. The ideal of new housing paying for all neighbourhood upgrades – roads, storm sewers, new rec centres – has been under strain, and may have to be abandoned or modified, with federal funding aid.
Some of it means a shift in expectations, away from the dream of single-family home ownership, and towards comfortable two- and three-bedroom family housing that doesn’t sit on a quarter acre lot.
We need to find changes that work in the long term, because rent is dropping, but it’s still high.