Calgary apartment vacancy rate decreases in 2012

Migrant numbers putting strain on accommodations

Continued migration to Alberta is putting the squeeze on rental accommodations. The apartment vacancy rate in the Calgary region averaged 1.3 per cent in October, down from 1.9 per cent last year, according to Canada Mortgage and Housing Corp.’s fall market survey released Thursday.

“Employment growth and higher incomes, supported by Calgary’s expanding economy, continued to attract migrants and increased demand for rental units,” said Richard Cho, senior market analyst in Calgary for the CMHC.

The apartment crunch will likely continue as the CMHC is forecasting 20,000 net migrants to the Calgary area in 2012 after 11,200 net migrants in 2011.

“Alberta is once again seeing some very strong interprovincial migration these days and many of these people are arriving in Calgary,” said Todd Hirsch, senior economist with ATB Financial. “Typically before looking at buying a home, the recently-arrived will rent an apartment. That’s where a lot of the strong demand is coming from, and it’s pushing down the vacancy rate in the rental market.”

The apartment vacancy rate in most zones in Calgary declined from the previous year, said the CMHC report. Areas close to downtown continued to have among the lowest vacancy rates in the city. The vacancy rate there fell to 0.5 per cent in October, down from 1 per cent in October 2011, CMHC said.

Rental demand has also pushed up rates, with same-sample rents rising six per cent in October, following a 1.8 per cent rise in the previous year. Bachelor units and two-bedroom units recorded an increase of 7.4 per cent and 5.9 per cent, respectively. Overall, the two-bedroom rent in Calgary averaged $1,152 in October, up from $1,087 last year. Downtown and the Beltline had among the highest average two-bedroom rents in the Calgary CMA at $1,240 and $1,222, respectively.

Don Campbell, president of the Real Estate Investment Network in Canada, said the low vacancy rate will continue to put pressure on rents and should grow demand in the resale housing market in 2013 and new home sales in 2014.

“Look for the market to perform well in 2013 with values going up more quickly than 2012,” he said.