The new rental reality

As anyone who rents in the Lower Mainland knows all too well, Vancouver has some of the most expensive residential rents in the country. In December 2024, for instance, the average rent for a one-bedroom apartment in Vancouver was around $2,534 a month. An average two-bedroom, on the other hand, will set you back close to $3,413 a month.

But some uncharacteristic good news for renters could soon be on the horizon. Because according to a report released last month by Desjardins, rent inflation could slow considerably in Vancouver over the next few years, offering some much-needed financial relief for the city’s 165,000 renter households – and potentially allowing savvy investors to benefit from a broader range of prospective tenants as well.

What’s behind the change

According to Desjardins, one of the main reasons for the predicted drop in rental increases is the federal government’s plan to reduce the number of new immigrants, non-permanent residents, temporary foreign workers and international students who come to Canada by as much as 20 per cent a year.

The theory is that, by reducing the number of immigrants and non-permanent residents, the demand for all kinds of housing – including both rentals and homeownership – will also shrink, which could help ease the current affordability crisis.

But for cities like Vancouver, which has traditionally attracted both immigrants and non-permanent residents at a much higher per capita rate than other parts of the country, the results could be even more dramatic.

In fact, some experts are predicting that these new measures could slow rent increases to be roughly in line with the overall rate of inflation in Canada, as opposed to the two or three times that rate that we’ve been seeing in Vancouver for the last few years.

What it means

For renters, slower rental inflation means an increase in affordability, a little more breathing room, and more money in their wallets.

But there could be a bright side for investors as well, who may see an increase in local demand as well as an uptick in people who are looking for longer-term places to call home, as opposed to temporary students or workers who may only want to rent a property for a year or two.

Of course, as with any change, it can be difficult to predict exactly what the long-range impacts are going to be. For one thing, there’s still some uncertainty over exactly how – and how quickly – the new immigration policies will be put in place. Then there’s the upcoming federal election that’s expected to happen next year, which could also result in more than a few changes to the proposed plan.

But regardless of how the details play out, if Desjardins’ predictions come true, one thing we can be certain of is that the cost to rent a home in Vancouver will probably get at least a little more affordable in the near future. Though when it comes to a heated market like Vancouver, only time will tell just how long that downward trend in prices will last.