61 percent of Victoria residents are renters. And rents have risen dramatically in recent years. This should be a top priority for everyone. It is for me.
It’s been known for decades, if not centuries, that a low rental vacancy rate means big rent increases. And a high vacancy rate means low rent increases. This chart illustrates the inverse relationship: when the vacancy rate is low, rents rise faster. And vice-versa.
– Source of chart: House Hunt Victoria, “Rental reprieve over: vacancy rate returns to 1%.”
Such charts exist for many markets, not just Victoria, and can be found with a simple web search, e.g.
– Source of chart: Jens von Bergmann, https://doodles.mountainmath.ca/posts/2022-02-18-vacancy-rates-and-rent-change-2021-update/Vacancy rates and rent change, 2021 update
A neutral vacancy rate is about 4%. Below that is a landlord’s market, and rents are pushed up faster.
Victoria’s vacancy rate is currently around 2%, and it’s generally been significantly lower than that for the last couple of decades. Like Vancouver, Victoria has a lot of demand. People keep moving here because we’ve got great weather and a great City and region. And we have lots of jobs, with one of the lowest unemployment rates in Canada.
This relationship between vacancy rates and rent increases has its parallel in the home purchase market. A small supply (few months of inventory on the market) compared to demand means a seller’s market with upward pressure on price. More supply inventory means a buyer’s market with downward pressure on prices. For years Victoria has generally been a sellers market – even in the last couple of years with high interest rates.
The housing supply in Victoria has gone up, just as it has in Vancouver. But the increase in supply hasn’t kept up with demand. Hence the big upward climb in rents and prices.
The bottom line is that if you truly want more affordability, more homes need to exist. Single-detached new houses are not even remotely affordable, and won’t be, so we specifically need more multifamily homes.
Blocking more multifamily homes causes harm to renters. So cities need to change their official community plans and zoning bylaws to allow more multifamily homes to be built (in the right places).
In Austin, recent city policy changes accomplished that, spurring a building boom of new multifamily homes. Market rents dropped by more than 20 percent.
“The city enacted a few policies that spurred a multifamily housing construction boom. Among these were reducing delays in the permitting process, eased rules limiting the height of buildings within 540 feet of single-family homes, and an end to parking mandates.”
– P Fabris, “Austin rents drop by more than 20% after home building surge. New policies encouraging housing density ease housing shortage.” (Building Design + Construction, March 6, 2025)
More on the changes in Austin: “Rents declined about 11% in older non-luxury buildings that cater to lower-income renters, known as Class C buildings.”
In Denver, with 20,000 new units on the market, the vacancy rate is above 4 percent and rents are down about 3.7 percent.
In Victoria, the current Council has approved record numbers of homes – several thousand since the fall 2022 election. It will take a several years to build them, with some of the larger projects involving several buildings estimated to take ten years to full build out.
And of course, in any city not every approved project ends up getting built. Also, more people move here every year. So Council’s work isn’t done, and we’re going to need to approve more. I’m committed to doing so.