It became increasingly difficult to find rental accommodations in Calgary in 2022, as the overall vacancy rate for purpose-built rental properties fell from 5.1% to 2.7%, its lowest level in since 2014..“With Calgary’s economy growing beyond pre-pandemic levels, the rental market tightened to conditions not seen since Alberta’s last economic boom.,” says Michael Mak, Canada Mortgage and Housing Corporation’s senior analyst, economics..Calgary received its share of the record migration to Alberta last year and while the supply of rental properties increased, it was not enough to meet demand, says Mak..“New buildings were completed near the city core and the eastern quadrants as optimistic expectations for rental demand helped spur growth in supply,” says Mak. “Affordability is a concern, since not enough homes are considered affordable for lowest income households.”.The inner city is where 45% of Calgary’s rental stock is located, says Mak..“The downtown zone’s rate decreased to 3.9%; the vacancy rate in the North Hill area dropped from 7% to 2%; while the Beltline, which has the most purpose-built rental units, saw a small increase in the rate to 5.1%,” he says..“This was the only rental zone to see an increase, which is mostly due to new units and buildings being in their leasing phase at the same time the Rental Market Survey was conducted.” .“Market intelligence suggests these new units will be leased relatively quickly, lowering the vacancy rate.”.The trend of rental demand moving toward the suburbs due to the pandemic saw a definitive reversal last year,” says Mak. .“Notably, vacancy rates for large buildings with 100 to 199 units fell from 11% in 2021 to .4% in the downtown core,” he says. “For comparison, across the census metropolitan area (CMA), the vacancy rate for such buildings was 1.3%. Demand for these buildings was slow to recover in 2021, because renters preferred smaller, cheaper buildings located further out in the city.”.“However, with in-person office work becoming more encouraged by employers and demand tightening the rental market, there are fewer and fewer options available to renters.”.On a city-wide basis, same-sample rents increased by 6%, the highest increase since 2014. .“Compared to a negligible change in 2021, this increase shows how demand has shifted throughout Calgary in 2022,” says Mak. .Increases varied depending on the area of the city..Rents increased 8.3% downtown and 6.2% in the Beltline, while further from the inner city, rents increased 8.8% in the northeast sector and 9.5% in the Fish Creek area..“These areas are more affordable compared to the pricier inner city, which may explain the higher growth percentages,” says Mak. “Newer units with more amenities can command a premium over existing rental stock. In fact, structures that were completed between July 2019 and June 2022 are rented for 34% over the average rate in the CMA.”. Builders and developers are putting a new focus on purpose-built properties.. “Operators and developers remain optimistic for future rental demand. Purpose-built rental apartments saw an above average net growth of 3,562 units, or 8%, a clear sign of this optimism,” says Mak. “This growth outpaces the 6% growth seen in 2021. About 1,500 of new units are in the downtown core and Beltline. These units are all in the largest rental buildings completed in the city this year, containing over 200 units each.”.The northeast and southeast sectors of the city had the greatest increases, at 19.4% and 13.5%, respectively..“For the southeast, this is a continuation of a multi-year trend, as development continues to expand through greenfield development,” says Mak. “Most new buildings have close to 100 units.”.“The northeast saw more units added to the universe in generally larger buildings with 100 to 199 units. Sustained growth in the rental supply will help alleviate affordability pressures currently seen in the market.”.The private rental condominium market vacancy rate is similar to the purpose-built rental market .“The rental condominium market makes up a significant portion of rental supply in Calgary and saw similar tighter conditions in 2022,” says Mak. “Vacancy rates fell to 1.8% from 4.2%, and average rents rose by $100, reaching $1,546. Investors are more likely to buy and rent out newer units, creating a premium compared to the purpose-built rental market.”.“While supply in this segment continued to increase, the growth of 2% is slower compared to the growth in purpose-built rentals.”.The vacancy rate for townhomes in the Calgary CMA was already low in 2021 at 2.9%, but has fallen further to 1%. .“These homes provide space for growing families, an underserved part of the population in the purpose-built rental market,” says Mak.
It became increasingly difficult to find rental accommodations in Calgary in 2022, as the overall vacancy rate for purpose-built rental properties fell from 5.1% to 2.7%, its lowest level in since 2014..“With Calgary’s economy growing beyond pre-pandemic levels, the rental market tightened to conditions not seen since Alberta’s last economic boom.,” says Michael Mak, Canada Mortgage and Housing Corporation’s senior analyst, economics..Calgary received its share of the record migration to Alberta last year and while the supply of rental properties increased, it was not enough to meet demand, says Mak..“New buildings were completed near the city core and the eastern quadrants as optimistic expectations for rental demand helped spur growth in supply,” says Mak. “Affordability is a concern, since not enough homes are considered affordable for lowest income households.”.The inner city is where 45% of Calgary’s rental stock is located, says Mak..“The downtown zone’s rate decreased to 3.9%; the vacancy rate in the North Hill area dropped from 7% to 2%; while the Beltline, which has the most purpose-built rental units, saw a small increase in the rate to 5.1%,” he says..“This was the only rental zone to see an increase, which is mostly due to new units and buildings being in their leasing phase at the same time the Rental Market Survey was conducted.” .“Market intelligence suggests these new units will be leased relatively quickly, lowering the vacancy rate.”.The trend of rental demand moving toward the suburbs due to the pandemic saw a definitive reversal last year,” says Mak. .“Notably, vacancy rates for large buildings with 100 to 199 units fell from 11% in 2021 to .4% in the downtown core,” he says. “For comparison, across the census metropolitan area (CMA), the vacancy rate for such buildings was 1.3%. Demand for these buildings was slow to recover in 2021, because renters preferred smaller, cheaper buildings located further out in the city.”.“However, with in-person office work becoming more encouraged by employers and demand tightening the rental market, there are fewer and fewer options available to renters.”.On a city-wide basis, same-sample rents increased by 6%, the highest increase since 2014. .“Compared to a negligible change in 2021, this increase shows how demand has shifted throughout Calgary in 2022,” says Mak. .Increases varied depending on the area of the city..Rents increased 8.3% downtown and 6.2% in the Beltline, while further from the inner city, rents increased 8.8% in the northeast sector and 9.5% in the Fish Creek area..“These areas are more affordable compared to the pricier inner city, which may explain the higher growth percentages,” says Mak. “Newer units with more amenities can command a premium over existing rental stock. In fact, structures that were completed between July 2019 and June 2022 are rented for 34% over the average rate in the CMA.”. Builders and developers are putting a new focus on purpose-built properties.. “Operators and developers remain optimistic for future rental demand. Purpose-built rental apartments saw an above average net growth of 3,562 units, or 8%, a clear sign of this optimism,” says Mak. “This growth outpaces the 6% growth seen in 2021. About 1,500 of new units are in the downtown core and Beltline. These units are all in the largest rental buildings completed in the city this year, containing over 200 units each.”.The northeast and southeast sectors of the city had the greatest increases, at 19.4% and 13.5%, respectively..“For the southeast, this is a continuation of a multi-year trend, as development continues to expand through greenfield development,” says Mak. “Most new buildings have close to 100 units.”.“The northeast saw more units added to the universe in generally larger buildings with 100 to 199 units. Sustained growth in the rental supply will help alleviate affordability pressures currently seen in the market.”.The private rental condominium market vacancy rate is similar to the purpose-built rental market .“The rental condominium market makes up a significant portion of rental supply in Calgary and saw similar tighter conditions in 2022,” says Mak. “Vacancy rates fell to 1.8% from 4.2%, and average rents rose by $100, reaching $1,546. Investors are more likely to buy and rent out newer units, creating a premium compared to the purpose-built rental market.”.“While supply in this segment continued to increase, the growth of 2% is slower compared to the growth in purpose-built rentals.”.The vacancy rate for townhomes in the Calgary CMA was already low in 2021 at 2.9%, but has fallen further to 1%. .“These homes provide space for growing families, an underserved part of the population in the purpose-built rental market,” says Mak.
