There are obvious causes to these effects, and they're Calgary's soaring rental rates paired with a major population influx. In 2023, rental rates increased at the fastest pace in almost 20 years, and the result is a vacancy rate not seen in 10 years. The provincial vacancy rate is now matched with the national rate at 1.5%, but in the market of less expensive rentals, the rate is below 1%. This is making affordable options a rarity and finding a rental extremely difficult for most households.
But wait, there's more! For five consecutive quarters, migration levels have surpassed 30,000 migrants per quarter, with Q3 2023 reporting an all-new record high of 56,306 migrants. While Alberta has never experienced this level of international migration, we are also seeing a surge in interprovincial migration. Alberta welcomed 45,194 interprovincial migrants from Q1 – Q3 2023, just shy of the annual record high in 2006 of 46,239.
Read our blog: 2023 Economic Review & 2024 Forecast
READY OR NOT, HERE COMES CALGARY
We are moving toward a place where Calgary can soon be comparable to Toronto or Vancouver,” said Anupam Das, professor of economics at Mount Royal University. “Clearly something is happening in Alberta.”Vancouver’s vacancy rate is 0.8% for two-bedroom apartments, and while it might have seemed outlandish to think Calgary could get to that point even just a few years ago, we're not too far off. With all signs pointing to Calgary's rental market growing to match Toronto and Vancouver, the city is bracing for even higher prices, lower vacancy rates, and more controls in the coming years.
Read our blog: Are We At Risk of Rental Controls?
Another lesser advertised consequence of plummeting vacancy rates is landlords don't need to provide as many incentives to attract new tenants. We'll mostly likely see less flashy offers, such as first month free rent, savings on internet/cable, discounts on amenities and parking, etc.
Another lesser advertised consequence of plummeting vacancy rates is landlords don't need to provide as many incentives to attract new tenants. We'll mostly likely see less flashy offers, such as first month free rent, savings on internet/cable, discounts on amenities and parking, etc.
WHERE DOES THAT LEAVE US?
Calgary is in a great spot! While these growth numbers are matching/setting records, we're not the first major Canadian city to experience this growth. We can look to the other major city centres and roughly gauge what Calgary's future rental market could look like, but we always take into consideration that every city is different, with different people, different goals, and different lifestyles.
We have a genuine passion for the Calgary real estate market at Urban Upgrade & NewInfills, and despite some current growing pains, Calgary is still one of the top rated cities in the world. We can see why so many people are flooding here! We're keeping our eye on the ebb and flow of the rental market and arising trends, and we'll always bring you the latest.
Read our blog: Canadians Flocking to Alberta
Source: Calgary Herald
