Monday, September 11, 2023, the BC Government announced the allowable rate increase to residential home rentals. This news could be looked at as a bit of relief for those who own a rental home and have seen their variable mortgage go up significantly in the last couple of years. To those who are in a long-term rental, it may put more stress on their monthly budgeting. The government appears to be trying to strike a balance between landlords who are now struggling to pay a mortgage and renters who might see an increase in their rent in an already inflated economy.

We have to question what this will do to the long-term state of rentals in Vancouver and the Fraser Valley, as we struggle with a lack of rentals already. I find areas like Langley, Abbotsford, and the rest of the Lower Mainland have some great options for investment as a long-term hold if an investor is not heavily reliant on the banks and the current high-interest rate. With current interest rates, having 20% equity in a home may not cover the costs of a home, but the increase in real estate long-term remains attractive to many to keep investing in rentals.

It wasn’t too long ago that I was renting and was lucky enough to remain in a lovely apartment without seeing much of an increase in rent. Over the last 7 years, the same place has almost doubled for people signing a new rental agreement. From a renter’s standpoint, although having a 3.5% increase next year would be an unpleasant surprise, the decision to stay in a rental rather than moving to a different rental remains likely a better option as new lease agreements are not subject to a maximum mandated rent increase and are only limited by the free market rate.

For some seeing the rental rates continue to climb, it may be an additional push towards purchasing a home. As recent times have shown us, we may not be free from Bank of Canada increasing the cost of borrowing but new purchasers can be hopeful that the rates will remain low