A huge number!
Ok this is New York, we are talking about. Manhattan to be precise, which as we know, is not as world class as Vancouver and has lots of land.
Actually the drop is probably much higher, as landlords are giving big incentives for leases, such as two months free rent for a 14 month lease. That is equivilent to another 10%+ drop!:
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a2UfZHjKxKrk
Of course this could never happen in Vancouver. BTW I tried looking up the Vancouver Vacancy rate, but had a hard time. Vacancy rates have increased across Canada with increased home ownership, by 1% according to the CMHC, but I couldn't find precise numbers for Olympicville.
Revisiting the Trump trade
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*Preface: Explaining our market timing models*
We maintain several market timing models, each with differing time
horizons. The "*Ultimate Market Timing Mo...
5 days ago
I wouldn't trust the CMHC to calculate the vacancy rate very well. The CMHC numbers often only track the traditional 'multi-tenant' buildings that haven't been built en-masse for the last 20-30 years in BC.
ReplyDeleteAlmost all new rentals are condos managed by private rental companies and amatuers on Craigslist. (which is where we have seen rents soften in the last few quarters) I would expect the higher-end rentals to soften first, so the CMHC numbers will be the last to show any significant change. (How ironic)
Wow that is huge. I wonder if that will happen here. From what I understand rents are more in line with prices in New York (though still not to a point where owning makes sense) so falling RE prices would result in falling rents. But here rents havent gone up nearly as much (from my friends specific experience his rent went from 800 in 1997 to 1050 now, but would be 1250 if he was a new tennant). So prices doubled and rents went up about 50%. That could mean that if prices fall 50%, we will only see a 25% reduction in rents.
ReplyDeleteThen again if interest rates rise, house prices fall and more people are forclosed upon, they will need to rent, possibly increasing demand. There are a lot of ifs and maybes but I think that if RE prices fall, rents will fall too, but at a slower pace.
I am torn at what to do when my lease comes up. I am pretty sure I could get reduced rent as my landlord has said that we are such great tenants. My fear is if I ask for it and she says no, then things are going to be tense and if I leave then I might not get a great reference from her.
I like the landlord as she is very helpful and really seems so care when something goes wrong, but feelings shouldnt really come into play with finacial decisions.
I like the place and the rent is managable, but staying when I could get a nicer place for cheaper doesnt make much sense.
I also understand that her costs dont change even if rental demand goes down. She still has the same mortgage, strata fees and taxes to pay regardless of how much the rent is. (she also revealed to me that her costs are over 2000 while the rent is just 1200).
Ahh well I guess I should be too concerned as the lease isnt up for another 7 months.
Anon- you are right. CHMC probably underestimates the vancancy rate by 1%-2% I would guess.
ReplyDeleteDavid- lets see what the sitaution is in 7 months. sounds like you have at least a 'no increase' situation.
I managed to get a 6% reduction in my rent.
ReplyDeleteAnd best of all, I am now month-to-month.
I can leave any time with 30 days written notice.