Even though the number of new rental units in both Calgary and Edmonton increased in 2019, neither city saw an easing of vacancy rates, according to the annual nationwide rental survey by Canada Mortgage and Housing Corp. (CMHC) released January 15.
Calgary’s rental vacancy rate remained unchanged from 2018 at 3.9 per cent, while Edmonton’s rate contracted to 4.9 per cent (from 5.3 per cent in 2018). This is despite 1,122 additional rental units coming on stream in Calgary last year, and 2,009 new units in Edmonton.
However, the average rent in both cities rose on an annual basis by less than inflation, up 1.7 per cent in Calgary and just 0.9 per cent in Edmonton.
CMHC’s Edmonton report said, “Rental demand [in Edmonton] continued to outpace supply, partly attributable to the steady population growth in 2019, mostly driven by international and interprovincial migration.”
Of the Calgary market, CMHC wrote, “A recovering labour market in Calgary has contributed to increases in interprovincial migration, which has supported rental demand. Following two consecutive years of declines, net interprovincial migration was positive in 2018 as more individuals moved to the area than left to another province.”
Increased demand from external forces can also be boosted by untapped potential demand, within the city, according to Eric Bond, CMHC’s senior specialist of market analysis.
Bond told Glacier Media when discussing the Metro Vancouver rental market, “What’s hard for socio-economists to quantify is the potential demand. How many people living in households with roommates, or living in the parental home, or living in other cities, would form a new rental household in this region if they could find one that they could afford? There is a lot of pent-up demand out there. All of those units that came on stream found tenants, the vacancy rate did not improve.”