Vancouver has a significant community of high end renters. The Waterfront and other upscale Downtown apartment buildings seem to have no trouble renting small units well over $2,000 a month and some spacious units over $5000 a month. There is no shortage of high end renters. Incomes required to support these rents are plenty to support a rather nice condo or home purchase. So one might ask, why are these renters, renting? Will they soon become buyers?
I have spent a fair time contemplating this issue. Sometimes people rent because they can't buy. Perhaps they lack a downpayment, or the credit score to obtain a loan. But these people are not those that are renting the expensive luxury units on the waterfront of Downtown. Buildings like Holland's Coen and Columbia, the new Aria, Riverwest, and Rediviva all have strict income and credit requirements that likely match those of a mortgage lender, they might even be tighter. So these renters are clearly choosing to rent.
Those that are capable of buying but choose to rent fall into a number of possible categories.
- Short term residents: Sometimes a highly paid person has a project they are overseeing in an area and want to live in a nice place while they finish the contracted project.
- Leery of buying: There is a group of people that are old enough to remember the last hard crash in 2009-2011 but too young to remember the boom bust cycle of real estate and economics. real estate is nearly always a good long term investment, not so much short term.
- Do not want the responsibility of ownership: There are people who simply do not want to invest the time and money into maintaining a home they own. Even condos have some interior maintenance issues, but honestly this one is tough to reconcile.
- Mobility: This was an oft cited reason young professional millennials cited for not buying in a series of well reported studies over the last few years.
Short term residents will always be a piece of the equation.
The leery of buying crowd is an increasingly smaller group, but they are still out there.
Responsibility of home ownership is curable. Many condos have HOA and building setups making the maintenance as low as renting or in some case lower.
The mobility crowd is still a thing, but I feel like that group is about to shrink substantially. The pandemic has created a new and potentially sizable group of remote workers. Some companies have embraced the idea of the remote worker. They have weighed the commercial real estate cost savings against any productivity losses and found the result favorable. Other companies have come to the opposite opinion and will likely return to traditional office work as soon as the pandemic is over. But those that have embraced will create a new group of buyers, some of which may find interest in high end real estate.
Kirkland Tower on the Waterfront will be the first test of this. Downtown Vancouver has a handful of very high end condos particularly those at Viewpoint in Vancouver Center. But most of the high end condo units are older now pushing twenty years. Kirkland will offer the first brand new modern luxury high rise condos in Vancouver since George W Bush was president. I feel like those 40 units are gonna go FAST!
Only time will tell and the time is coming soon. Kirkland will likely complete that project by summertime. You can follow all of the exciting activity in Vancouver's urban living seen here: www.urbanlivinginthecouv.com.