Improving net migration and stricter ownership conditions have translated into improvements in the rental market.
Vacancy rates have eased, helping reduce the oversupply. As this trend is expected to continue, we should start to see some room for further rental-rate growth and, eventually, improvements in ownership demand.
However, the transition to ownership will be slow, as rental vacancies are still higher than normal and consumers are still adjusting to changes in the lending market.
What’s changing in the rental market:
- Vacancy rates in the Calgary rental market trended down in 2018, according to the most recent Canada Mortgage and Housing Corp. (CMHC) survey. Purpose-built rental vacancies dropped from 6.7 per cent for two-bedroom units to 4.2 per cent.
- Easing vacancy rates are primarily due to improvements in net migration and higher barriers to ownership that are keeping individuals in the rental market.
- The easing supply in this sector has helped support a modest improvement in rental rates following two years of declines.