Edmonton’s rental market continues to stabilize as newer multi-family stock attracts tenants and pushes down the city’s vacancy rate.
A new market report from CBRE Limited analyzes the multi-family sector during the first half of 2017 and found that the overall rental vacancy rate has decreased from 6.3 per cent in December 2016 to 5.9 per cent in June 2017.
For newer properties, built post-2000, the June 2017 vacancy rate is only 3.9 per cent. Older properties post a vacancy of 6.3 per cent.
“Apartment fundamentals are expected to improve as activity in the service sector, several large infrastructure projects, and increased stability in the energy sector continue to attract potential tenants to the city,” the report states.
The townhouse market has seen slightest vacancy rate, due to a high demand and limited supply. In the first half of 2017, only 1.1 per cent of townhome stock was vacant.
Alberta’s oil recession has actually boded well for the city’s population grow, which has caused job seekers to migrate from rural areas into the province’s major centres like Edmonton.
While current landlords are enjoying increased tenant demand, multi-family properties are seeing a decrease in buyer demand. Investment in rental properties is down 59 per cent year-over-year.
However, CBRE believe the decrease in sales is due in part to new developments that are still under construction but expected to be readily absorbed when completed and put on the market.
“We expect that several for-sale construction projects that are nearing completion will transact towards the end of 2017, picking the investment volume back up,” said CBRE’s Jane Woertman in an email.
Investment dollar volume in the first half of 2017 totalled $130.4 million. Eight hundred and eighty-four rental suites have been sold so far this year.
As of June2017, there are approximately 2,002 purpose-built rental suites under construction in Edmonton, according to the Canadian Mortgage and Housing Corporation.