The CMHC Rental Market Report was released on Monday morning and the apartment vacancy rate in Calgary is the highest it’s been in over 25 years.

‘For Rent’ signs are popping up all over the city now that the vacancy rate has hit seven percent, which is up from 5.3 percent last year.

The national average is sitting at about 3.4 percent and analysts say a rise in supply and Calgary’s current economy is to blame for the above average increase here.

“The rental market in general in areas that are more resource driven, where their economies are dependent on energy, we’re seeing their vacancy rates a bit higher compared to some of the other regions across the country,” said Richard Cho, CMHC, Principal of Market Analysis. “Part of it is the job loss we’re seeing in Calgary. That combined with the slower population growth is having an impact on rental demand but also in the market we’re seeing more rental supply, more choices for tenants, especially in the secondary market, which is impacting the vacancy rate in the purpose, build side.”

Calgary is among the top five major Canadian cities with the highest rental housing vacancy rates:

  • Saskatoon (10.3%)
  • St-John’s (7.9%)
  • Edmonton (7.1%)
  • Calgary (7.0%)
  • Saguenay (7.0%)

The lowest rates were seen in Victoria and Abbotsford-Mission (0.5%), Kelowna (0.6%) and Vancouver (0.7%).

The CMHC says the average rent for a two bedroom apartment in Calgary is $1258 and that property management companies and landlords are now offering incentives to stay competitive.

“Landlords are certainly facing more challenges in this environment, they’re having to work a lot harder to attract and retain tenants. We’re seeing more incentives being offered in the market as well as some reductions in rental rates,” said Cho.

“So the incentives that we’re offering to entice renters are things like lower rents, sometimes they will get, depending on the suite and depending on the building, they’ll get up to 20, 25 percent off on a one year lease, so that’s pretty significant, in addition, we have an extensive renovation program,” said David Mcilveen, Director of Community Development, Boardwalk Rental Communities.

CHMC says the vacancy rate in Calgary will remain at this level for now but that the housing market in general will stabilize moving forward.

 “We’re forecasting the rate to remain pretty close to where it’s currently at. Although the economy is expected to gradually improve moving forward, we’re also expecting to see a lot more supply come on to the market next year as well, which will kind of off-set the gains in rental demand,” said Cho. “Moving ahead we’re expecting to see the labour market gradually improve, employment is forecast to be positive, slightly positive next year, as well as more stability in population growth. In terms of vacancy rates and rent and the housing market in general, we’re expecting to see things stabilize moving forward.”

In Canada’s larger centres, rental rates for a two-bedroom apartment rose by two percent, on average, compared to last year.

For more information on the CMHC’s rental vacancy rate increases, Click HERE.