Average monthly rent on the rise
CALGARY - The tight rental market in Alberta's urban centres has eased this year but the overall vacancy rate still remains low.
The Spring Rental Market survey, released by Canada Mortgage and Housing Corp. on Wednesday, said the rental apartment vacancy rate was 1.8 per cent in April compared with 1.5 per cent in April 2013.
"Rising demand in recent years has encouraged new rental construction in Alberta, which has added to the supply of rental apartments. These additions helped to offset increased rental demand through net migration, resulting in a stable vacancy rate in April 2014," said Lai Sing Louie, regional economist for the Prairie and Territories Region for the CMHC, in a news release.
On the basis of a sample of structures common to both the 2013 and 2014 surveys, the average rent for a two-bedroom apartment rose 5.5 per cent in Alberta, said the agency. In Calgary, same sample rents for a two-bedroom apartment increased five per cent from April 2013 to April 2014. Meanwhile in Edmonton, same sample rents rose by 6.4 per cent. The continued low rental vacancies in Alberta's two largest markets prompted the increase in same sample rents, said CMHC.
It said an average two-bedroom apartment in Calgary in new and existing structures rented for $1,267 in April. In Edmonton, the average two-bedroom apartment rent in April was $1,180 per month. The highest rent among Alberta's urban centres was in Wood Buffalo where an average two-bedroom apartment rented for $2,061 in April. Medicine Hat maintained the lowest average two-bedroom rent at $739 per month.
CMHC said the lowest vacancy rate in Alberta was zero per cent in Canmore. Vacancies in Wood Buffalo were the highest in the province at seven per cent. Both Calgary and Edmonton reported low vacancy rates in April of 1.4 per cent.
In Calgary, the vacancy rate increased from 1.2 per cent in April 2013.
Richard Cho, senior market analyst in Calgary for the CMHC, said the vacancy rate in Calgary was as low as 0.5 per cent back in 2007.
"Rental demand in Calgary is getting a strong boost from elevated migration," he said. "Net migration posted a new high in 2013 following a record year in 2012. We did see the vacancy rate edge higher compared to the previous year. Competition from the secondary rental market and movement into homeownership contributed to the increase in the vacancy rate. Despite the slight gain, the vacancy rate in Calgary is still relatively low.
"We are anticipating the vacancy rate to remain near current levels. Our vacancy rate forecast for October 2014 is 1.2 per cent, up from 1.0 per cent in the same month a year earlier."