Moncton renters offered perks as vacancy rate jumps
Vacancy rate in greater Moncton area is above its historic average, CMHC says
Some landlords and rental companies in the greater Moncton area are being forced to find creative ways to attract renters as they deal with a high vacancy rate around the city.
In the last three and a half years, 1,700 new apartment units have been built in the greater Moncton area, which is roughly the same amount of apartments built in the seven years before that.
The high volume of vacant apartments has already pushed rents down by $50 to $100 a month.
Now, businesses are using special perks to get renters into their units.
Tony LeBlanc, the chief executive officer of Ground Floor Property Management, said new tenants have been offered access to pool tables, foosball tables and televisions.
'However, people are starting to panic a little bit. They're going to offer the promotions to break even or lose less.'— Tony LeBlanc, CEO of Ground Floor Property Management
But LeBlanc said his company has gone even further to sweeten the deal for potential renters, such as including the heat and electricity in the rent.
"We also have some special unique situations in Dieppe where we're offering free internet and free housekeeping services," LeBlanc said.
LeBlanc said two hours of free housekeeping a month is offered for as long as the tenant lives there.
Jason Beaton, a market analyst with the Canada Mortgage and Housing Corp., said the vacancy rate in the greater Moncton area is above the normal rate for the last 10 years.
The CMHC pegged Moncton’s vacancy rate at 6.7 per cent in October 2012 up from 4.3 per cent a year earlier.
The agency estimated the vacancy rate in Moncton would rise to between 7.5 per cent and eight per cent by the fall of 2013 with additional increases in 2014.
Saint John’s vacancy rate is expected to be between 10 and 10.5 per cent in 2013 and jump again in 2014.
The vacancy rate is also expected to increase in Fredericton. However, a CMHC report said the vacancy rate in the capital city is predicted to stay between four and 4.5 per cent in 2013 and move higher next year.
Pressure on businesses
Given the number of other spaces that people can rent, LeBlanc said providing perks is just a cost of doing business.
LeBlanc said it would take "a very long time" to fill his units without adding the promotions.
Many of his competitors are doing the same thing, so it has forced him to follow along.
"We've all had to kind of bow down to the same levels of promotions as everybody else. If all landlords stuck together and said let's not offer anything. Then we could all run in the same boat," he said.
"However, people are starting to panic a little bit. They're going to offer the promotions to break even or lose less."