CALGARY – There’s a few silver linings to the economic uncertainty in Alberta, and one of them is rent.
Calgary tenants have more choices than ever, and at cheaper rates.
Many people are taking advantage, like nursing student Jessica Duquette, who’s been commuting to Mount Royal University from her parents’ home in Okotoks for years. Now, she can finally get into the renters’ market.
“Because it’s a little more attainable for us to afford. So it’s not as daunting as it once was,” Duquette said.
In her experience looking for rentals lately, she said it’s more about what the landlord can offer.
“You’re noticing a lot of trends with incentives being offered, like free Internet, TV, half-price security deposits. I’ve seen places offer two free months if you sign a one-year lease,” Duquette said.
A recent market report done by the Canada Mortgage and Housing Corporation (CMHC) indicates Calgary’s vacancy rate has tripled in the last year and a half.
“From our last survey of October 2015, the vacancy rate came in at 5.3 per cent – which is up from 1.4 per cent in the same month of 2014,” Richard Cho, analyst for CMHC, said.
Cho said layoffs appear to be a factor but there are several reasons at play for the jump, such as a drop in migration to Calgary and an increase in the supply of purpose-built rental units.
Property manager and owner of Mountain Park Real Estate Warren Phipps said he thinks the biggest reason for an increased rate of empty properties is bad timing for new condos on the market.
“We’re seeing a lot of new buildings come on to the market, so there’s a whole bunch of condo units that have just come on,” Phipps said. “And corporations aren’t bringing in as many people, so those furnished condos that people were expecting to rent…that short-term person isn’t coming into town to rent them.”
Phipps said he’s seen a 50 per cent increase in rental properties with his company since the fall.
“So that is a significant increase in supply. And demand has been lower since not as many people are moving into the city,” Phippssaid. “We’re telling people – this is the price you want to be at if you want to find a tenant today. I can’t tell you what the price will be for next month’s rent.”
Prospective renters like Duquette are keeping an eye on rental sites to use them as a bargaining chip or jump on deals.
“I kind of follow the trends with that and I’ll watch the adds on the apps and I’ll get updates to see if they’re dropping the price,” Duquettesaid. “You look at it more of…we’re helping you pay your mortgage – can you offer us this?”
Prices will likely stay in the renters’ favour for a while, predicts CMHC.
“We’re not expecting anything to change a whole lot this year or next year, as the economy is still in the process of recovering,” Cho said.
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“I think some people are finding desperation. If people are carrying two mortgages and it’s been vacant for two months – they just want to get someone in paying rent,” Phipps said. “What we use to see is somebody that would come in – and in an hour come back to us and say,‘I’ll take it.’ Now, they’re seeing ten to 12 places and get to choose where they want to live, I guess.”
Renters are definitely shopping around for the time being, forcing some landlords to either take a hit on their mortgage, or try selling their property.
Now in Calgary, analysts said the average monthly rent for a two-bedroom condo is about $1,330.00.