When is a 'bubble' not a BUBBLE?

[Johnny Horton]

Bwahahaaaa, those July sales figures have you really shook up, don't they Tommy?

...who cares?
Up or down...that's the market as opposed to heavy metal music which sucks all the time.

[jesse1]

Miami, which ranks No. 8, owns a whopping 12.7% rental vacancy rate, up from 11.4% a year ago

That is certainly high; more bad news for prices down there. Vancouver vacancy rate is likely between 5-8% according to property managers. Rental rate growth is an absolute necessity to stave off a collapse, IMO. I'm not seeing it, yet.

[metalhead]

as opposed to heavy metal music which sucks all the time.

[Austin]

Vancouver vacancy rate is likely between 5-8% according to property managers.

according to the CMHC it's 2.2% .. IF we're comparing against the official numbers out of Miami, I think I'd go with the official numbers out of Vancouver. Unless they have some sort of superior way of determining vacancy rates.

[eyesthebye]

Now sales beats 08!!

Barely.
Bwahaha, way to look at the good side of a rotten piece of fruit.
I did see one Sold sign in Abbotsford last week. I guess things aren't so bad.

depends on where you are - Abottsford is definitely in the shitter.
Lots of sold signs in my neighbourhood and surrounding

[Johnny Horton]

MetalHead...send me some more. I am trying to like it. It's just not happening for me.

[jimtan]

Aha! This is important.

Look at Austin's chart of the United States vacancy rates. This fits exactly into what I said in this thread. Bubbles can be obvious before they pop.

The American rental vacancy rate reached 10% (!!!!!) in 2002 and held there, even as the bull market roared on. Can you believe that?

Last I heard, they had a national vacancy of 18m homes. That's 15% of their nation's housing stock. That's 10 years supply.

[jesse1]

Do you really think Miami's vacancy rate is close to 20%? Cmhc numbers are not representative of the market vacancy rate. You don't have to believe me but guys who are in the business say vacancy rates are north of 5% in Van proper; no idea what the burbs are doing. Miami is likely between 10 and 20%. They are in big doodoo and their prices could fall even further unless occupancy goes up. This does not preclude Vancouver from a meltdown.

Fwiw San Diego has seen steady rental rate growth through the recession. Don't know the vacancy rates there though.

[Austin]

I'm willing to entertain the notion that CMHC is missing out on the facts, but I'd like to know why.

Certainly, I think slavishly relying on published stats is a risky way go about predicting the future.

Anyways, I'm wondering then is the real vacancy rate 2x everywhere else? Or is CMHC just wrong about Vancouver?

CMHC vacancy rates may not be as bad as they look on paper, says B.C. Housing Minister Rich Coleman. He said the statistics only reflect vacancy rates for purpose-built rental properties. But a lot of investors have bought condos and are now renting them out -- something not reflected in the CMHC vacancy rate stats. However, he agrees the lack of rental housing is a problem.

This is interesting .. the demand for 'purpose' built rental properties might be greater than 'investor' rental properties. I suppose that's not too surprising .. investors probably have a greater need for higher rental rates and are probably less skilled in attracting long term tenants.

Anyways, from the googling I've done it seems that CMHC numbers are mostly accurate. Landlords seem to use the numbers quite comfortably. Really like to know why you think they're so wrong.

[jimtan]

Hmmm!

I wouldn't accept hearsay without checking the facts.

5% means 1 out of every 20. Implies that almost every rental building would have a vacancy sign out front. I walk around Vancouver city a bit. I just don't see that.

My observations from foot recce in Marpole, Cambie, Kits and West End generally agree with the CMHC number; about 1% vacancy or 1 out of every 3 small buildings.

BTW, CMHC does do a rental condo estimate. In Fall 2009, they said

“The vacancy rate for investor-owned rental condominiums increased in 2009, but to a lesser extent than that for purpose-built rental units. The rental condominium vacancy rate moved up to 1.7 per cent from 0.6 per cent last fall. The stock of rental condominiums is generally newer and features more amenities than their purpose-built rental counterparts. These benefits shore up demand for rental condominiums..”

Makes sense to me that a city's condo and rental building vacancies are in line with each other. It might be different if you are just looking at a particular district. No?

[Austin]

Thanks jimtan. Do you have a link?

[jesse1]

In the BC Rental Market Report from CMHC there's this:

The survey targets only privately initiated structures with at least three rental units, which have been on the market
for at least three months.

The investor-owned data is extremely spurious due to the the means CMHC collects its data: through telephone surveys. All I can say is property managers have told me vacancy rate is around 5%-8% for investor-owned units. Purpose-built units have lower vacancy rates. You can choose to believe my sources or not but... rents haven't increased markedly year-over-year. If the city-wide rental vacancy rate were truly around 2% we should be seeing significant upwards pressure on rents. I'm not seeing it. But go ahead and put faith in the CMHC data with its obvious uncertainty and best of luck in your future endeavors.

[Austin]

I am wondering why the cmhc doesn't call up property managers and just ask them if they know better.

[Thompson]

I am wondering why the cmhc doesn't call up property managers and just ask them if they know better.

Because CMHC knows those property managers are all fat ass....

All I can say is property managers have told me vacancy rate is around 5%-8% for investor-owned units. Purpose-built units have lower vacancy rates. You can choose to believe my sources or not but...

they always get 5% to 8% vacancy rate even the outside is absolute zero vacancy. It's not so difficult to figured it out if you guys have some experiences about rental business from the real world, not just from book to book.

[jimtan]

In the BC Rental Market Report from CMHC there's this:

The survey targets only privately initiated structures with at least three rental units, which have been on the market
for at least three months.

The investor-owned data is extremely spurious due to the the means CMHC collects its data: through telephone surveys.

???

Actually, this means that the survey is pretty inclusion. Contrary to the allegation that the survey is unreliable.

CMHC Fall 2009 Page 53

“Canada Mortgage and Housing Corporation (CMHC) conducts the Rental Market Survey (RMS) every year in April and October to estimate the relative strengths in the rental market. The survey is conducted on a sample basis in all urban areas with populations of 10,000 and more. The survey targets only privately initiated structures with at least three rental units, which have been on the market for at least three months. The survey collects market rent, available and vacant unit data from sampled structures. Most RMS data contained in this publication refer to privately initiated apartment structures. The survey is >conducted by a combination of telephone interviews and site visits, and information is obtained from the owner, manager, or building superintendent. The survey is conducted during the first two weeks of April/October, and the results reflect market conditions at that time.”

Moreover, the secondary rental market survey provides a wealth of information on the condo rental market. They did a lot of work.

“The SRMS has three components which are conducted in selected CMAs:
• A Household Rent Survey of all households to collect information about rents.
• A Condominium Apartment Rent Survey of households living in condominium apartments to collect information about rents.
• A Condominium Apartment Vacancy Survey of condominium apartment owners to collect vacancy information.
All three surveys are conducted by telephone interviews. For the condominium apartment vacancy survey, information is obtained from the owner, manager, or building superintendent and can be supplemented by site visits if no telephone contact is made. For the other two surveys, information is collected from an adult living in the household. All surveys are conducted in September and October, and the results reflect market conditions at that time.”


For Austin,

Try this

https://www03.cmhc-schl.gc.ca/catalog/p ... 0626174308