Rental Construction and the Effect on Victoria Condo Market

Currently we have record high rental construction starts, between Harris Green, Hudson Place "Two" changing from Freehold/Strata to Rental, Dockside Greens two towers of Rentals, and Bayview Place building out multiple Rentals, along with the various other rental towers along Johnson street, and nearly no presale condos in the works. Will this increase condo prices, or will such a huge number of units (that are quality built steel/concrete rentals, from reputable companies) put enough supply/alternatives for the consumer that it will put downward pressure on pricing? Will this impact homeowners with basement suites and their ability to get quality tenants? Or is vacancy rate just so low that this will be a drop in the bucket?

Currently there are 900 condo units under construction within the City of Victoria, compared to 700 rentals.

 

There are several rental projects on the horizon in the planning stage, but not actual "starts." We are also very far from any sort of record rental start territory, which I believe would have been at its peak circa 2015-2016.

I could have worded that better. I think what I am getting at is I think we will have a large discrepancy between apartment buildings being finished and condos after 2021. Most of the condos are approaching completion while most of the new construction starting (excavating, working on parkades) is apartments (Dockside Green, Hudson, Cox Rental, etc.). Roundhouse is looking to move towards rentals if they ever start, etc. 

Dockside will be comprised of a condo tower in this coming phase, too. But yes, there is certainly going to be a shift towards rental housing in the years to come as the cost of homeownership will continue to rise and banks are not prepared for leniency beyond the 1/3 mortgage:earnings ratio while there is no threshold on a maximum rent:earnings ratio.

However, 30+ year amortizations are inevitable. Which means consumers will be able to carry a higher gross mortgage. And with rental projects, so long as they’re strata-titled (200 Cook, The Row, and others) they can convert from rental to ownership (some have a 10-year limitation period from doing so).

I’ll have to look into whether or not Hudson Place II is strata titled. I don’t think it is, but I’ll double check. Langford, meanwhile, is encouraging rental developers to consider strata titling rental proposals should there ever be a softened rental market.