Short Term Rental Ban

Another factor slowing down the rental market is short term rentals. In May 2024 the BC Government introduced restrictions on short term rental properties. It effectively eliminated short term rentals in specific types of properties, those that are not part of a primary residence. How has this affected the rental market?.

Many of these short term rental properties that are now considered illegal have re-entered the regular rental market or they have entered the sales market. This has created a greater supply of product in both of these markets. When supply increases over the demand there is pressure on the prices to be reduced. We have not seen a significant decrease in sales prices yet which is still keeping some buyers away from the market, and forcing many of these products to the rental market. 

The short term market is made up of furnished products and these are often geared towards the tourist and student markets. Both of these markets have also been affected as the economy has slowed, the trade issues with the US and the Federal Government’s change to immigration especially students, has affected this market greatly. With less foreign students allowed into the country the areas near schools are being affected dramatically. In tourist areas the ban has had an effect of increased hotel prices reducing the tourism in those areas which has an effect on other businesses in those regions as well.   

The owners of the short term rental products are not happy as they had purchased and planned on renting out their properties in that market which is often more lucrative than the regular rental market. Any investment has risk and one needs to assess the risk of that investment. One key factor that can affect any investment is the change in laws that can happen at any time. Prior to the BC Government making this change cities around the world were making the same decision due to rising housing costs and therefore was not an unexpected change.  

This is an example of when the government’s change in laws significantly changed the investment of short term rental properties.         

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