BC Announces Rent Increase Guideline for 2012

[Lady Luck]

Rent increases for 2012 are allowable up to 4.3% Up from last years 2.3%

[jimtan]

Ouch! Why so much?

[rofina]

Ouch! Why so much?

If that was the increase for the the past 10 years, we wouldn't have nearly the overvaluation problem that we do today.

How do you justify double digit asset price increases YoY, yet question rent increases at 4.3%?

[jesse1]

Ouch! Why so much?

The increase is tied to around 2% above CPI inflation. Last year saw a spike in inflation due to commodity prices increasing. It looks that 2012 will be much more subdued. Still, carpe diem when it comes to rent increases; these allowables may not be around forever!

I really do hope landlords start raising the rents. Vancouver's yields are piss-poor. This is a perfect opportunity to make valuations a bit more sane.

[thirdlittlepig]

If landlords do raise the rents beyond the capacity of people to pay, you are going to see some problems cropping up. Vacancies are already higher than they have been for some time, people are already stretched to make ends meet, more people lining up for food banks every month (including the working poor). It doesn't matter if the increase is "justified" because landlords have overpaid for homes bought in recent years. Tenants are constrained by ability to pay, which is not increasing with the cost of living. It's going to be crunch time in the B.C. economy. If increases didn't fly during the "boom", what makes anyone thing they will fly right now?
Maybe the plan is to tip the richer renters into buying, if they have been planning to, have a little downpayment saved up, but have been reluctant to take the leap because rent looks like a better deal. It will still leave the poorer people scrambling, being forced to change location to cheaper place to rent to save a few bucks.