Calgary's rental market stages a comeback
Vacancy rate falls for second straight year, while average prices rise
Calgary's rental market appears to be experiencing a comeback after a years-long slump, with new data showing the vacancy rate has fallen for a second straight year, while average rents have risen for the first time since the recession.
The Canadian Mortgage and Housing Corp. reported 1,400 new rentals were built in Calgary over the past year, bringing the total stock to almost 40,000 units.
But a surge in demand for apartments was far stronger than the growth in supply. The CMHC said Calgary's vacancy rate dropped to 3.9 per cent in October, down from 6.3 per cent a year earlier.
The higher demand also drove up average rents for the first time in three years, though the gains were marginal. Two-bedroom apartments rented for an average of $1,272 in October, up by 1.5 per cent from a year earlier.
Newcomers boost rental market
The CMHC said demand appears to have been fuelled by a resurgence of in-migration, especially from other provinces.
Analyst James Cuddy said Calgary's slow economic recovery may also have made it more difficult for people to move into home ownership.
"Perhaps renters are renting for longer, which puts additional demand on the market," he said.
Min Ku, of Slokker Homes, oversees 60 rental units in the southwest community of Currie Barracks. He said any units that come up for rent are generally filled in a few weeks.
Ku said his rentals, which range from a bachelor apartment to a townhouse, are ideally located in a neighbourhood with little competition, given that most neighbours are homeowners.
"A lot of people want to buy, but they just can't make it work, and that's why they need to rent," he said, adding his tenants are generally young professionals.
Landlord making hundreds less per unit
Despite the CMHC report of a slight increases in prices, not all landlords are reaping the benefits.
Anwar Nour, an independent landlord who owns 45 units, said he's seen strong demand in recent months, but he's still getting $300 to $400 less per unit than he did during the last economic boom.
"Demand is there, but there's lots to choose from," he said. "It's better to let somebody move in with lower rents than to leave them empty."
Nationally, the vacancy rate was 2.4 per cent last month, dropping from three per cent a year earlier, despite an increase in the supply of newly built apartments.
Ontario, B.C. and Manitoba all reported higher vacancy rates, while Alberta, Quebec, Saskatchewan and the Atlantic provinces saw declines.
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