Rents going up, vacancies slim
Edmonton apartment rents are climbing while vacancies have fallen to their lowest level in five years.”The apartment vacancy rate in the Edmonton region fell from 4.5 per cent in October 2005 to 1.2 per cent this October,” Canada Mortgage and Housing Corporation reported Thursday.
Demand is boosted by strong in-
migration and by a healthy job market that lets some young people leave their family homes — and others split from shared accommodation to their own apartments.
Meanwhile, the number of renters moving to home ownership has fallen as interest rates and house prices have risen.
“On the supply side, rental apartment completions have been weak in 2006,” CMHC noted. “A number of rental units have been converted to condominiums, further reducing the supply of apartments available for rent.”
Average rents for two-bedroom units in the Edmonton region now are $808 — up 10.4 per cent in the 12 months through October, 2006.
Compounding that, rental incentives were offered by 19 per cent of landlords in October, 2005 — but by only three per cent this October.
In 2007, “demand for rental accommodation will continue to outstrip new supply, with apartment vacancies expected near 0.9 per cent,” predicted Richard Goatcher, CMHC senior market analyst.
“A lot of landlords have told us there will be further increases in January,” Goatcher said. In 2007, he expects rents to rise about 12 per cent.
The Canadian Federation of Apartment Associations issued a news release Thursday, arguing that vacancy rates are misleading.
“Even where vacancy rates are low, rental suites are still available because of tenant turnover,” it said. “In Calgary, the vacancy rate is 0.5 per cent but the availability rate is 1.6 per cent.”
In October, only 241 Calgary apartments were vacant — but another 492 units were available through turnover.
The CFAA acknowledged that “due to very low incomes, some households cannot afford to rent apartments of the size they need.”
CFAA president John Dickie recommended that the federal government help with income supports rather than construction subsidies.
“Portable housing allowances are the most cost-effective way to make housing affordable for low-income Canadians,” he said. “Unlike many other housing programs, they also preserve choice for tenants.”
CFAA member groups represent owners and managers of more than one million rental units.