Market Shift: Why New Towers Are For Rent, Not For Sale
Executive Summary
At a Glance: The Supply Shift
The "Rental" Wave: You are seeing more cranes, but fewer "For Sale" signs. North Vancouver developers are pivoting heavily toward rental-only buildings.
The Incentive: Local governments are trading "extra height" for "rental units." If a developer agrees to rent the building out, they get to build taller.
The Buyer Squeeze: With more land used for rentals, there are fewer new condos available to purchase, which creates a long-term supply shortage for buyers.
1. Why Developers Stopped Selling and Started Renting
For decades, the standard play was: Build a tower, sell the units, move on. Today, that model is changing. Why? Because the rules changed.
The "Density Bonus": Land on the North Shore is incredibly scarce (trapped between mountains and ocean). To maximize it, the City offers a trade: if you build rental housing, we will let you build a bigger, taller building.
The Math: A developer might be allowed to build 6 stories of condos or 12 stories of rentals. That extra size often makes the rental project more profitable in the long run.
2. The "Big Money" Move: Institutional Investors
You might notice that a local developer builds a building, but suddenly a massive company owns it.
Example: The Axir apartments in Upper Lonsdale were built by a local developer but bought by CAPREIT, a massive investment trust.
Why it matters: Big pension funds and investment trusts love North Vancouver real estate for the same reason you do—it’s safe and valuable. They are buying entire buildings to hold for 20+ years. This removes those units from the buying market forever.
3. The "Hybrid" Model: Condos on Top, Rentals Below
We are seeing a new type of building that tries to do both.
The Sentinel (West Van): The bottom 9 floors are rentals; the top floors are condos for sale.
Baden Park & Parkside: These communities mix rental buildings right next to townhomes for sale.
The Benefit: This creates diverse neighborhoods, but it also means that in a 200-unit project, only 100 might actually be for sale.
4. Analyst Verdict: What This Means for You
If You Are a Renter: This is great news. "Purpose-Built Rentals" (buildings designed to be rented forever) are much more stable than renting a basement suite or a condo from a landlord who might sell it next year. You get professional management and long-term security.
If You Are a Buyer: This creates a "Supply Squeeze." Every piece of land used for a rental tower is a piece of land not used for new condos.
The Risk: As the population grows, the supply of purchasable homes isn't keeping up.
The Prediction: This lack of new inventory will likely keep prices high for existing condos, as there is less competition coming from new construction.
About Matt Council
Matt Council is a top-performing North Vancouver Realtor and West Van specialist with a background in finance. He moves beyond the sales hype to offer clients a data-driven, pressure-free approach to buying and selling real estate on the North Shore. Whether you are evaluating a presale in Lower Lonsdale or a detached home in Lynn Valley, Matt helps you understand the numbers behind the move.
Thinking of making a move? Let’s run the numbers.