The BC Provincial government announced on October 16th that they are making changes to the requirements for short term rentals in the Province. The change is, short term rentals will not be permitted in larger municipalities over 10,000 except in your principal residence. What that means is, you can rent a room or basement suite in your home, but you are not permitted to rent an entire condo, townhouse or house that you do not live in. 

How will this affect the housing market?. The government is under pressure to find ways to increase housing supply and reduce housing costs. They feel this will bring a number of properties back to the rental and housing market which are currently being used as short term rentals only. We have heard a number of owners of rental properties have moved to short term rentals as they have not been happy with the tenancy laws in BC. This will take time before we see the effects in the marketplace. I think more people will choose to sell the property than return to the rental market. Either action of selling or returning to the rental market will put downward pressure on both the sales and rental markets. More rental products in the market may cause a reduction in the potential rental rates. Our experience is that in the long run this will have little effect to reduce the cost of renting and rather will return more housing options to the selling market. 

These actions often slow development, similar to the increase in interest rates which has caused many developers to hold off on plans for future developments of new products as profitabilty has left the market. With less development of new products that puts upward pressure on the sales and rental market rates. We believe this action will slow the development of purpose built rental products in the coming years. 

We are unsure what the immediate effect will be on the rental market and the  principal residence factor doesn’t take effect until May of 2024. Eventually the rental rates will stabilaize though this may take a few years of this action taking effect. During covid rental rates increased significantly due to many owners selling properties as the housing sales market increased dramatically. This removed a number of rental products from the market putting upward pressure on the rental prices.  As covid ended more product has entered the market which is putting downward pressure on the sales/rental markets, and this is why many landlords have moved to the short term rental market. Laws can and will change sometimes with short notice.

Need assistance managing your rental property. 

Cartref Properties can assist you, call today to discuss your needs. 

You can find more information about us at: www.cartrefproperties.com