Many new, high-quality options available for renters in Edmonton
Out with the old and in with the new aptly describes how last year ended and 2021 started for Edmonton's rental market.
Fourth quarter figures, released last month, for new launches of rental product in the city show an increase of 877 new units to the market, according to a recent report by Urban Analytics.
“The numbers just show that there is a lot of resiliency in the marketplace in Edmonton, despite the challenging conditions of the pandemic,” says Andie Daggett, manager of rental market data for Alberta at Urban Analytics.
The occupancy rate did decrease slightly from the third quarter of 2020 in the final three months of the year by one per cent to 90 per cent, but she notes that's more a factor of developers adding new product to the market.
All told, nine new projects launched in Edmonton in the final three months of 2020.
“That many launches are always going to make an impact on the occupancy rate,” she says.
“However, if you just look at buildings that are stabilized, occupancy rates increased in the fourth quarter over the third quarter.”
Among stabilized projects — generally a few years old — the occupancy rate increased to 96 per cent in the fourth quarter from 95 per cent in the third quarter.
“The downtown saw a 13 per cent decrease in occupancy, but it also saw six project launches, which brought 593 units to the area, so there was a ton of new product introduced.”
But Daggett adds among its stabilized products' occupancy was 93 per cent compared with just 68 per cent when new projects were included for the downtown area.
Overall, the rental market remains strong in the city, demonstrated by rising rents.
Rents per square foot increased to $1.67 in the fourth quarter from $1.64 in the third quarter — though the rate is flat year over year.
“Edmonton is really consistent with rents,” she says. “But this past quarter was really positive.”
Daggett further notes it was the first increase in the average rent per square foot since the second quarter of 2019.
Driving rent prices could be new-found demand for higher end options. One illustration of that growing preference is the success of Hampton Gardens in the city's West End.
The project of 189 units leased up in about eight months, Daggett says.
Realtor Caitlin Heine with Truhome Real Estate Team and Re/max Real Estate, who helped with leasing the project, notes the West End does not have a lot
of higher end, new rentals.
“While we did get a range of renters, it is important to note how millennials ... are drawn to these types of rentals,” she says.
The project builds on the current trend of renters looking for better amenities than what they can find in existing older stock. Most developers are more focused on providing more amenities than ever before; however, they also must consider the renters' ability to pay the higher rents that come with additional perks, Daggett adds.
She points to new downtown projects where rents average $2.05 per square foot.
The higher rent conditions also offer opportunity for investors in condominiums. They can rent a condo for similar cost but with more perks like parking.
“It's definitely a good option for renters,” Daggett adds. “With all the product available it's still a renters' market so they're able to shop around.”