This is interesting. In the US, the luxury rental market is seeing a bit of a boom as the wealthy move from owning to renting:
So in March he sold the Manhattan apartment he bought in 2008 for about the same price he paid and moved — along with his wife and child — a few steps away into a luxury, two-bedroom rental unit in a brand new building.
Lee wouldn’t disclose what he’s paying, but similar two-bedroom apartments in the building usually rent for $11,000 a month.
“I wanted to protect ourselves from prices going down,” says Lee, who is a managing director at a major bank. “I didn’t want to be an owner anymore.”
Lee has company. Demand for luxury rental units has increased as wealthier individuals who can afford to buy are deciding not to, according to brokers and real estate analysts in affluent areas of the country such as New York City, Chicago and San Francisco.
“More affluent Americans are opting to rent as oppose to buy,” says Jack McCabe, an independent real estate analyst and CEO of McCabe Research and Consulting in Deerfield Beach, Fla. “Within the last year, so many people have seen their family and friends get burned in real estate. They don’t see it as being a risk free investment as they used to.”
Uh… better late than never, eh guys?
Actually rents are going both down and up, depending on which category. The CMHC report is out and in Metro Vancouver we’re seeing higher vacancy rates that seem to be having some affect on rents.
According to the CMHC, 3 bedroom rents are up, while 2 bedroom rents are down slightly.
The thing I found most dramatic is the vacancy rate. Last I heard this was around 1 percent, but now its 2.2%.
The increase, compared with 2.1 per cent last fall, represented opposing forces of higher levels of first-time home ownership and job cuts during the recession resulting in young tenants doubling up or moving back home. Both trends helped take renters out of the market, according to, Robyn Adamache, CMHC’s market analyst for Metro Vancouver.
Adamache added that an increase in the supply of rental housing — 2009 saw 915 new rental units added to the overall stock — also helped raise the vacancy rate.
Personally I moved at the beginning of summer and was able to very easily talk $100 off the monthly asking rent for my family, and this is in a professionally managed building with one owner. I’ve rented from amateur landlords before and I never will again after the difference I’ve seen here. It’s incredibly relaxing to have everything in the building well cared for and everything in the suite fixed at a moments notice.
There seems to be no end to problems at the Olympic Village. You’d think there would be lots of demand for luxury affordable housing and having it sitting empty is a bit of an embarrassment:
The province has rejected the only three bids that came in from operators willing to run Vancouver’s much-debated social housing at the Olympic village.
That leaves the city scrambling for a new solution to fill the 252 units in those three buildings, meant to be the city’s legacy from the Olympic Games. They have been sitting empty for six months, after a lengthy negotiation process between the city and province on how to structure the bid process for non-profit operators.
The operators were supposed to provide $48-million in lease money up front, which the city is anxious to get as a down payment for the $110-million buildings – all part of a project that is financially stressed in every direction.
Full article in theGlobe and Mail