The fall rush of post-secondary students back to Calgary schools will put the already tight rental market under even greater pressure.
Since Canada Mortgage and Housing Corporation’s (CMHC) last report on Calgary’s rental market in April, the city has witnessed census numbers showing near-record population growth and flooding that seriously impacted both owners and renters.
Add in housing prices that have climbed to levels not seen since 2008, and you’ve got a situation that could have widespread implications for those looking to buy or rent.
“Absolutely the lack of rental vacancy in the city has made it tougher for me to find a place in my price range,” said Carrie Brown, who began shopping for a two-bedroom condo in the city’s northwest in June. Since then, Brown’s search has been the cause of some irritation.
“The search for a place has been frustrating, partly due to lack of availability in general and lack of available property in my price range – something that I am comfortable with on my own.”
According to CMHC, Calgary was tied with Edmonton for the lowest vacancy rate of any major Canadian city in April, with just 1.2 per cent of residential rental space in the city up for grabs. When combined with the fact rents in the city climbed by more than seven per cent between April 2012 and April 2013, it makes for a scenario CREB® President Becky Walters said has contributed to the number of Calgarians looking to buy rather than rent.
“I think some people would have been in the [housing market] but not necessarily expecting to move as quickly. So I think they’re making the moves because they’re recognizing in the last couple years we’ve had a lot of inventory in apartments and townhomes that has been eaten up,” said Walters, who as a REALTOR® herself has seen the impact of a lack of affordable rental space first hand.
“I’m selling a unit to a family buying for their daughter [who’s] going to university for the next four years and they’re not that easy to find. They had certainly looked at both (renting and buying). They were looking to rent to begin with, and then they realized how expensive it is. I’ve got a son that’s renting as well and it’s very expensive.”
From the student’s point of view, Mount Royal University’s manager of Residential Services Natasha Reynolds said “while it’s becoming increasingly difficult to find room for everyone, the agency hasn’t had to say no to anyone yet.
“It is getting tighter and tighter as we come to the deadline, but we still have been able to place our students, so we haven’t had to turn anyone away as of yet.”
Although just how much of a factor Calgary’s rental squeeze has played in the number of MLS® sales taking place remains to be seen, however CMHC senior market analyst Richard Cho stated the situation has given would-be renters motivation to enter the market.
“There have been a number of factors contributing to the resale activity seen in Calgary, including demand from renters,” said Cho. “With a decline in the vacancy rate, it may take more time for prospective renters to find places, as well as putting upward pressure on rental rates. As such, this has given some renters an incentive to seriously consider purchasing a home.”
With nearly $7 billion in sales through mid-August, Calgary’s real estate market is currently on track for a record-breaking year in 2013. Having previously eclipsed the $9 billion dollar mark only three times in history (2006 – $9.9 billion, 2007 – $11.3 billion, 2012 – $9.1 billion), year-to-date MLS® sales in 2013 were roughly $870 million above the same point in 2012. The sales increase comes despite a two per cent reduction in year-to-date listings and 6.85 per cent increase on the average price of a Calgary home.