Calgary apartment vacancy rate decreases in 2012

Down to 1.3%

CALGARY — The apartment vacancy rate in the Calgary region averaged 1.3 per cent in October, down from 1.9 per cent last year, according to Canada Mortgage and Housing Corp.’s Fall Rental Market Survey released Thursday.

“Employment growth and higher incomes, supported by Calgary’s expanding economy, continued to attract migrants and increased demand for rental units,” said Richard Cho, senior market analyst in Calgary for the CMHC.

The apartment crunch will likely continue as the CMHC is forecasting 20,000 net migrants to the Calgary area in 2012 after 11,200 net migrants in 2011.

“Alberta is once again seeing some very strong interprovincial migration these days and many of these people are arriving in Calgary,” said Todd Hirsch, senior economist with ATB Financial. “Typically before looking at buying a home, the recently-arrived will rent an apartment. That’s where a lot of the strong demand is coming from, and it’s pushing down the vacancy rate in the rental market.”

Recently, Sam Kolias, chairman and chief executive of Calgary-based Boardwalk Real Estate Investment Trust, told the Herald that the local rental market continues to see high demand as people keep moving to the province.

In the REIT’s third quarter, which ended September 30, it has 5,310 rental units in Calgary and the occupancy rate was 99.34 per cent, up from 98.89 per cent last year.

The apartment vacancy rate in most zones in Calgary declined from the previous year, said the CMHC report. Areas close to the downtown where there is a high concentration of employers continued to have among the lowest vacancy rates in the city, said the CMHC.

The vacancy rate in the Downtown zone reached 0.5 per cent in October, down from 1.0 per cent in October 2011.

The strong demand for rental accommodations combined with lower vacancies has led to an increase in rental rates in Calgary. Same-sample rents increased 6.1 per cent in October, following a 1.8 per cent rise in the previous year. Bachelor units and two-bedroom units recorded an increase of 7.4 per cent and 5.9 per cent, respectively. The average same-sample rent for three-bedroom units increased 4.2 per cent from a year earlier, said the agency.

Overall, the two-bedroom rent in Calgary averaged $1,152 in October, up from $1,087 last year. The Downtown and Beltline had among the highest average two-bedroom rents in the Calgary CMA at $1,240 and $1,222, respectively. The Southeast and Other Centres recorded the lowest two-bedroom rents in October, averaging $998 and $1,005, respectively.

Vacancies for rental condominium apartments declined to 2.1 per cent in October, down from 5.7 per cent in October 2011. The condominium rent in CMHC’s 2012 survey averaged $1,288 per month, down from $1,378 last year.

“Condominium apartment rents are typically higher compared to units in the purpose-built rental market as the buildings are generally newer and may include additional amenities such as a fitness centre, entertainment room, and heated underground parking,” said Cho.

Don Campbell, president of the Real Estate Investment Network in Canada, said the low vacancy rate wil lead to two things.

“Strong upward pressure on rents across the board, at all levels. Upward pressure on resale housing market first in 2013, then new home sales in 2014,” he said. “Look for the market to perform well in 2013 with values going up more quickly than 2012.”

CBC News

Posted: Dec 13, 2012 9:19 AM MT

Last Updated: Dec 13, 2012 9:17 AM MT

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The number of apartments available in the Edmonton area is half of what it was one year ago.

The vacancy rate sits at 1.7 per cent — down from 3.3 in 2011, according to Canada Mortgage and Housing Corporation’s Fall Rental Market Survey.

“Strong net migration and continued job growth in Edmonton contributed to the reduction in vacant rental apartments, as did a modest reduction in the supply of rental units,” senior market analyst David Lan said in a press release.

Three-bedroom suites reported the lowest vacancy rate at 1.1 per cent, followed by a 1.4 per cent vacancy rate in both two-bedroom and bachelor units, said the survey. One-bedroom units had the highest vacancy rate of two per cent.

The areas with the lowest vacancy rates were Leduc and West Jasper Place at 0.4 per cent and 0.6 per cent, respectively, followed by the University area and the southwest, both at 0.7 per cent.

The survey found as vacancy rates declined, rent levels moved upward.

Average rents jumped 3.7 per cent between October 2011 and October 2012 up from one per cent the year prior.

The average monthly rent for all apartment units in the Edmonton region was $965 in October 2012. Two-bedroom apartments rented for an average of $1,071 in October 2012, while one-bedroom units rented for an average of $882.