Due to higher vacancy rates, there has truly never been a better time to rent for people living in Edmonton. Low oil prices and an increased number of new homes on the market have combined to create some great deals for local renters, with landlords and management companies offering discounted prices on suites.
This is in addition to the greater availability of units in general, which of course means better selection for potential tenants. As the price of oil continues to fall, landlords are having a tougher time renting out apartment suites, and this has increased vacancies on a national level.
Here are a few statistics from CMHC’s 2015 Rental Market Survey:
- The national vacancy rate for these apartments reached 3.3 per cent in October, up from the 2.8 per cent rate seen last year at the same time.
- The rise in the national vacancy rate was due to lower net migration in regions most affected by low oil prices as well as an increase in the supply of purpose-built rental apartment units.
- During the same period, rent for existing two-bedroom apartments was up 2.4 per cent in census metropolitan areas.
- Tenants paid $960 on average in October 2015 to rent a two-bedroom new or existing apartment.
- Across 16 major urban centres in Canada the vacancy rate among condos that were being rented out was up to 2.3 per cent.
- The average rent for a two-bedroom condo was $1,487.
- Edmonton had the highest rental-condo vacancy rate at 5.3 per cent. Other cities in the Prairies rounded out the top three: at 4.9 per cent.
- Calgary had the second-highest rate followed by Regina at 4.6 per cent.
- Hamilton, on the other hand, had a rental-condo vacancy rate of 0.4 per cent, the lowest among areas tracked.
- Toronto was the priciest market for those looking to rent a two-bedroom condo as the average rent for these units was $1,754.
- Those looking for cheaper rents may want to turn to Quebec City. There, $1,065 is enough, at least on average, to rent out of a two-bedroom condo.
The difference in price between condominiums and apartments is due to the fact that condos are typically newer and tend to offer a greater range of amenities than rental apartments.
In Edmonton, the local economy has been rocked by a blend of economic forces. This includes lower oil prices, an influx of new rental properties and an overall weak economy. As previously stated, this is creating a large supply of choices for renters.
The dropping oil prices have led to there being far less employment opportunities in many Canadian cities, Edmonton included. This in turn means that there are fewer people moving into our city from other provinces.
For many years Alberta was a big time job creator, which led to people from all over the country – and around the world – to come and settle down in Alberta. This has now changed with the large-scale job losses, and there have been many tenants who are leaving Alberta.
In BC and Ontario, landlords have reported that they are getting far more qualified tenants now compared to before. Many of these people used to work and rent in Alberta.
The Influx of New Rental Properties
Before the drop in oil prices, many builders wanted to take advantage of the growing demand for rental properties by building new multi-family residential rental units. This was done on the assumption the economy would remain strong and people would continue coming to Alberta to work and rent. Now many of these new rental buildings have been built and are available to be rented. This has resulted in an over-supply of rental housing.
Because of the surplus in available units, landlords are reducing their rental properties tofill their vacant rental units, and some are even offering incentives to get people to rent from them.
This includes everything from no deposits to free cable and Internet packages. Despite these incentives, landlords and property managers say it is still taking them much longer to fill their vacancies.
The good news is that experienced and successful Edmonton landlords have been down this road before. Economies are cyclical in nature and there is no reason to panic. It is only a matter of time before things begin to look up again. If you’re looking to fill some empty suites then have a look at our article on 5 Ways to Lower Your Vacancy Rates.