Alberta renters have a lot of choice at a high price

buildingAlberta has the unlikely distinction of having Canada’s highest rental apartment vacancy rate and the most expensive average monthly rents.

 

The average monthly rent in Alberta for two-bedroom apartments in new and existing structures was $1,029, according to Canada Mortgage and Housing Corp.’s spring rental market survey released Thursday.

That is up slightly from $1,023 a year ago.

 

Alberta also had Canada’s highest vacancy rate at 4.7 per cent, down from 6.0 per cent a year ago.

 

CMHC regional economist Lai Sing Louie said Alberta’s nation-leading average rental rates in the face of high vacancy are a holdover from rent increases which started kicking in during 2006 and 2007 as the provincial economy revved up and demand for housing soared.

 

“It takes a lot for rents to come down,” Louie said. “A person who has invested in a rental project has cash-flow issues and other financial obligations that they have to meet. Everything is locked in and landlords tend not to reduce rents unless they absolutely have to keep tenants.”

 

Instead of significantly cutting rents, landlords turned instead to incentives such as a month’s free rent to attract renters, Louie said.

 

But incentives are on their way out as migrants begin returning to Alberta, spurring demand for housing, he said.

In the Edmonton census metropolitan area, it was slightly tougher to find and a little more expensive to rent an apartment in the Edmonton region in April than it was a year ago.

 

“A strengthening economy, especially in the energy sector, has improved labour market conditions in both (Edmonton and Calgary) CMAs,” said Richard Cho, a senior market analyst for the federal agency.

 

“This has resulted in improved job creation, attracting an increased flow of migrants and strengthening the demand for rental units.”

 

The apartment vacancy rate in the Edmonton census metropolitan area dipped to 4.7 per cent from 5.2 per cent in April 2010, the survey said.

 

Average rent for a two-bedroom apartment in the Edmonton region rose to $1,029 from $994 a year earlier.

In April 2009, the average two-bedroom rent in Edmonton was $1,059.

 

Nationally, the average rental apartment vacancy rate in Canada’s 35 major centres decreased slightly to 2.5 per cent in April, from 2.9 per cent in April 2010.

 

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