Calgary’s rental housing vacancy rate has quadrupled in the last year. According to Canada Mortgage and Housing Corporation (CMHC) the vacancy rate in Calgary is well above the national average at 5.3%.
Compare that to this time last year when Calgary’s housing market was the tightest in the country at 1.4%.
Good News & Bad News
That’s good news for renters who should have some flexibility in negotiating the term of their lease, monthly rate and pet restrictions.
Bad news for real estate investors in Calgary and Edmonton who may have to spend money marketing properties and offer incentives on empty units. Good news for real estate investors watching for property values to keep falling, as sellers face the same downward pressure on home prices as landlords are facing as they seek renters.
In their annual Rental Market Survey, CMHC confirmed that ever-growing number of rental units in apartment buildings are currently vacant in Calgary and Edmonton as the price of oil stubbornly continues to take its toll.
Monthly Rents Slow to Adjust
Despite a glut in rental units in these two cities, tenants seeking housing are so far only reveling in choice, and not necessarily in how much they have to pay.
The average rent of a house or apartment has not come down. In fact, monthly rent rose ever so slightly. Calgary and Edmonton are in the top five most expensive rental markets in Canada. So while the vacancy rate may be high, rents in Calgary in particular remain the second-highest in the country, right behind Vancouver.
The average monthly rental for a typical two-bedroom apartment unit in Calgary is $1,332 which is $10 a month more than last year. A two-bedroom condominium is $1,500. The latter generally offers more amenities than a standard apartment building and commands a higher monthly rate.
Vancouver came in at $1,360 per month, on average. Compare that with what other Canadians are paying at $960 a month.
Will Rental Rates Fall?
Gerry Baxter, executive director of the Calgary Residential Rental Association, believes tenants will soon see price adjustments as leases expire in the new few months. This time last year, Alberta’s economy was only beginning to show signs of slowing down. Since one-year leases are common, these will expire in the new few months giving prospective renters plenty of negotiating room.
Baxter also points to the high vacancy rates reflecting the current state of the economy in Alberta. In a media release, he says workers in the oil patch who migrated here to find work are going back home in the hopes of finding steady employment. In addition, fewer people are moving from other parts of the country to Alberta.
Across the country, the average vacancy rate rose to 3.3% last month, up from 2.8% in October 2014. CMHC attributes the cross-country increase to several factors, including new apartment buildings constructed specifically for leasing or renting.
Here are the rankings across the country:
Top 5 Cities for Condos (two-bedroom rent per month)
#5: Ottawa Number 5: Ottawa @ $1,330
#4: Edmonton @ $1,461
#3: Calgary @ $1,522
#2: Vancouver @ $1,543
#1: Toronto @ $1,754
Cheapest rent for two-bedroom condos is in Quebec City @ $1,065 a month.
Top 5 Cities for Apartments (two-bedroom rent per month)
# 5: Ottawa @ $1,172
#4: Edmonton @ $1,259
#3: Toronto @ $1,274
#2: Calgary @$1,332
#1: Vancouver @$1,360
Cheapest rent for two-bedroom apartments is in Trois-Rivieres, Quebec @ $581.00