A Vancouver property manager says the Bank of Canada’s interest rate cut earlier this month just isn’t enough to turn renters into homeowners.
Keaton Bessey, managing broker at Greater Vancouver Tenant and Property Management Ltd., says June has been a normal month for his company, which manages about 170 properties in the Lower Mainland.
No more tenants have departed than usual, and none have given notice that they’re leaving because they bought a home.
“[Despite] the emails, Facebook posts, and Instagram Reels from realtors… It’s nothing out of the ordinary,” Bessey said.
Bessey’s company is strict that its tenants’ take-home pay after tax must be three times the monthly rent of the unit. As a result, it caters to renters who have more of a financial cushion than the many Metro Vancouver tenants who pay half or more of their income toward rent.
But it appears even renters comfortably within affordable housing guidelines still aren’t making the leap.
“Any renters moving from a one-bed renting to a one-bed owning, their costs are going to be quite a bit higher,” Bessey said. “If I was renting right now, I’m not sure how aggressively I’d be looking to buy into the same kind of product just to be an owner.”
Rebecca Casey, president of the Canadian Mortgage Brokers Association of BC, told Daily Hive earlier in June that the .25 interest rate cut means mortgage holders will pay about $15 less per month for every $100,000 borrowed.
For someone taking out a $500,000 mortgage, that means monthly payments would be only $75 less.
For those looking to buy, the change would only afford them $25,000 to $40,000 of additional borrowing power.
“It’s not enough to flood the market by any means,” Casey said. “But it could encourage those who’ve been sidelined to take another look and take another run at trying to buy a home.”
Bessey agreed that the market doesn’t appear to be experiencing a rush of people trying to get in, saying the interest rate drop just isn’t enough to make the difference for many people — especially renters looking to buy their first place.
“It’s still crazy expensive.”