Landlords offer creative incentives as Edmonton rental rates nosedive
Rental houses among units hardest hit by falling rates
Average housing rental prices in Edmonton have dropped 12 per cent in the past year, and it's pushing landlords to offer creative incentives.
Everything from free cable to free utilities, or a free month in exchange for signing a one-year lease, are on the table for would-be renters.
According to Rentfaster.ca, there are currently 3,676 Edmonton listings on its website. Last year at this time, there were only 2,396 rental properties listed. Their vacancy rate is now between seven and eight-and-a-half per cent.
"The higher end properties have been the ones hit the hardest," said Mark Hawkins, president of Rentfaster.ca.
"The higher end condo, the furnished properties, and houses require a lot more monthly rent. People are very price sensitive these days. If they can save money on rent, they're going to take that opportunity."
Edmonton Rental Market Overall — Average Rent
Reached a Peak, August 2015 - $1423
Today - $1251
Difference of $172 or 12%
Edmonton Apartment — Average Rent
Reached a Peak, August 2015 - $1192
Today - $1065
Difference of $127 or 10.7%
Edmonton Condo — Average Rent
Reached a Peak, August 2015 - $1729
Today - $1438
Difference of $291 or 17%
Edmonton House — Average Rent
Reached a Peak, April 2015 - $2377
Today - $1888
Difference of $489 or 20.5%
For those renting and managing properties, the decrease in rental prices seems even worse than the statistics show. John Mclean manages more than 100 properties and says he has noticed a 20 to 25 per cent decrease in rental prices.
"There was a time when downtown, we were renting an apartment for say, $1,250 for a one bedroom suite," said Mclean of Castlegate Property Management. "We're now lucky if we're getting a thousand dollars for it."
"They (landlords) are looking for someone that covers their costs. There's been some cases where we're barely covering those costs at all. It just makes it tough on both ends."
Mclean says potential tenants have the luxury to be picky when looking at properties to rent. Years ago, landlords could meet three prospective tenants before settling on the best one. But now, he says, five to ten prospective tenants might circle through a unit and none is in a rush to commit.
That's leading landlords to be more creative with incentives to entice a renter to sign a one-year lease.
"Right now we're giving out incentives where if you sign a 12 month lease, we're giving you the last month of that lease for free," said Mclean.
An economic trend
"Rents have been coming down," said John Rose, the city of Edmonton's chief economist. "You can see it in the consumer price index. Edmonton's consumer price index is well below the national average and the provincial average."
He says the slowdown of new migrants coming to Edmonton for work has driven the decrease in rental prices.
"Obviously people arriving don't want to buy a house right away," said Rose. "They want to check out the community and make sure their job is working out before they purchase a home."
Rose predicts rental prices will remain low until the middle of next year, but he expects the economy to pick up around that time, along with a decrease in the unemployment rate.
Canada Mortgage and Housing Corporation is expected to release its latest rental survey this month. Rose expects the vacancy rate to be around five to six per cent.