A once-hot apartment rental market in Calgary has cooled off significantly over the past year — with vacancy rates rising and rents dropping for the first time in over a decade.
The Canada Mortgage and Housing Corporation’s fall market survey stated the apartment vacancy rate more than doubled in Calgary, leaping to 5.3 per cent in October 2009, up from 2.1 per cent in October 2008.
Rents also took a tumble, dropping nearly five per cent over the past year, as the CMHC noted the average cost of a two-bedroom apartment dropped to $1,099 from $1,148 last year.
Richard Cho of the CMHC said several factors, including lower migration, rising unemployment and homeownership affordability have triggered a higher vacancy rate and potentially lower rents.
“As a result, some property owners have offered incentives and rental rate reductions in an attempt to attract new tenants and keep existing ones,” Cho said.
Gerry Baxter of the Calgary Apartment Association said they’ve noticed the same trend though he believes the actual vacancy rate might be slightly higher — between five to seven per cent.
“It’s pretty bad out there from a landlord’s perspective, at this time,” said Baxter, noting many landlords are offering reduced rates and incentives.
“It’s a very competitive business. You can’t run a business with an empty building.”