As more and more Canadians from other parts of the country are moving to Alberta for a lower cost of living, there’s a catch 22 situation — that migration might be driving up rents in cities like Edmonton and Calgary that are drawing those fed up with high costs elsewhere.
That comes as housing is expected to form a major part of the upcoming federal budget next month.
The average asking rent in two of Canada’s most expensive cities — Toronto and Vancouver — saw a decline last month while Edmonton and Calgary saw some of the highest spikes, according to Rentals.ca and Urbanation’s newest National Rent Report.
The report, released on Tuesday, said average asking rent for purpose-built and condo apartments decreased by 3.3 per cent annually in Vancouver and 1.3 per cent annually in Toronto to $3,017 and $2,803, respectively.
But the question is, will the number of people searching out affordability actually make things less affordable as more and more head to cities long viewed as less expensive?
David Dale-Johnson, executive professor of real estate at the Alberta School of Business, said the movement of people from other provinces of Canada to Alberta means the housing crisis is being spread out through the country, instead of easing.
“That now means we better darn well build some more housing in Alberta, because if those rent increases continue, they’re going to be unsustainable here as well,” he said.
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He added that job growth in Alberta and increased immigration from outside the country are also contributing factors. He added that for many Canadians outside Alberta, the province has become more attractive since the advent of remote work.
While average rents in Alberta ($1,531 for a one-bedroom) are still significantly lower than Ontario ($2,221) and B.C. ($2,207), rents are rising rapidly in the province’s biggest cities.
Among the major markets, Edmonton saw the steepest increase, with a rent increase of 17.3 per cent to reach an average of $1,489 for purpose-built and condo apartments. While the rate of increase slowed down in Calgary compared to January, it was still the second-fastest-growing market last month, with asking rents for apartments up 10.6 per cent annually to $2,059.
“The rapid rate of rent growth in Canada is unrelenting,” said Shaun Hildebrand, president of Urbanation in a statement about the rent report earlier this week.
“While some markets are experiencing a softening in rents, others are seeing an acceleration, with an underlying theme that rental supply remains grossly insufficient to meet current levels of demand.”
The report said, “Compared to two years ago in February 2022, just before the start of interest rate hikes by the Bank of Canada, average asking rents in Canada have grown by 21 per cent or $384 per month.”
Dale-Johnson said, “the rental market has become much more attractive to many households because of high mortgage rates.”
Housing is expected to form a major part of the upcoming federal budget on April 18.
On Tuesday, NDP Leader Jagmeet Singh called for reforms to prevent renovictions, where people are evicted in order for property owners to do renovations on the property, often raising the rent after.
Finance Minister Chrystia Freeland said on Monday that housing will be a key theme in the budget.
“For me, it’s actually pretty simple,” she said. “It’s housing, housing, housing. Supply, supply, supply, affordability, a strong economic plan that delivers great jobs and a real focus on younger Canadians.”
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