The region's major markets are seeing significantly lower vacancies
Western Canada’s rental residential market is seeing a return to relative stability, four years after an onslaught of oil price declines have drained much of the area’s economic and employment strength.
The worst effects of the petro crash, deemed mainly responsible for the loss of more than 40,000 jobs in the region, now appear to be dissipating, if the region’s growing number of tenants and lower vacancy rates are any indication.
Figures from the CMHC showed that vacancies declined from 7.5% in 2017 to 5.5% in 2018 in Alberta. In Saskatchewan, the decrease during the same time frame was from 9.3% to 8.7%.
“Calgary and Edmonton now have some of the most affordable rents in the entire country. Five or six years ago, we had the exact opposite situation, where our rents were one of the highest,” Boardwalk REIT chairman and CEO Sam Kolias told The Canadian Press.
Kolias cited affordability as the major element impelling these lower vacancy rates, with average monthly rents for occupied units under his company now at $1,138. This was even lower than the $1,199/month just before the major oil price crashes in 2015.
Read more: Declining home prices in the West pushes national average down
Indeed, market observers have noted that the rental sector is benefiting from a boost provided by weaker home purchase volume. Renters are largely steering clear from home buying given Western Canada’s economic uncertainty, along with recent interest rate hikes and tighter mortgage qualification requirements.
Earlier this month, the Calgary Real Estate Board reported that the market’s February home sales fell by 10% year-over-year, while the average price declined by 6.5% during the same period. In Edmonton, year-to-date sales for all residential asset classes shrunk by 11% annually.
