Quote:
Originally Posted by whatnext
So the smart money with a long term horizon would invest in building rental and avoid all the CACs. There's alway rental demand in Vancouver, I don't recall a time when the vacancy rate was ever above 2-3%.
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The issue is smart money cant really invest in Vancouver long term - pension funds, insurance funds, etc despite having near zero vacancy in residential and commercial are largely absent from the market for the simple reason that they cannot justify the typical capital outlay required for the obscenely low cap rates present even at near zero vacancy rates.
Its a circular issue - the reason vacancy rates are low is because the response time from developers and investors is so slow.
If a US market had vacancy rates as low for as long as Vancouver does, you have dozens of developers tripping over themselves to build on spec.
That's not the case when the return is around 3% and the boards of funds turn down the projects.