The next wave of comprehensive new rental apartment projects in Calgary is not scheduled to be completed until 2019 and 2020 but the city is expected to experience further tightening, which will in turn continue to place upwards pressure on monthly rents, says a report by Urban Analytics.
The research firm defines ‘newer’ as rental apartment projects completed since 2011 and it is currently monitoring 37 newer purpose-built rental apartment projects with an aggregate total of 5,364 rental apartment units.
“Since beginning the process of updating this sector of the residential market in Calgary monthly nearly two years ago, the availability of newer purpose-built rental units has tightened significantly,” said Urban Analytics.
It said that the vacancy rate in the newer purpose-built rental market was just three per cent in June. In terms of rental units, there was only 160 units available for rent of the total rental apartment universe of 5,364.
“By comparison, in March 2017 the total vacancy of the rental apartment universe monitored by UA was 40 per cent. The higher vacancy at that time can be largely attributed to the recent launch of the Versus development by ONE Properties, which added over 444 new rental apartment units to the market around that time,” said the report.
“By October 2017, the vacancy rate for newer purpose-built rental apartments had fallen to 11 per cent.
Six months later, the vacancy rate had dropped further to nine percent. The massive drop in the availability of newer purpose-built rental apartments in the Calgary market over the past 15 months illustrates how this sector of the market has tightened substantially.”
The drop in the vacancy of newer rental accommodation has pushed monthly rates higher.
Respected business writer Mario Toneguzzi is a veteran Calgary-based journalist who worked for 35 years for the Calgary Herald in various capacities, including 12 years as a senior business writer.