Rents fall as Calgary's apartment vacancy rate hits 25-year high

Calgary's apartment vacancy rate hit seven per cent in October,thehighest level in more than 25 years,according to a new report from the Canada Mortgage and Housing Corporation (CMHC).

The city's weak labour market has affected rental demand, the annual rental market report states, while supply in both the primary and secondaryrental markets has risen.

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"In Calgary, we've had some pronounced job losses. Migration and population growth have also slowed down, which are usually key drivers in terms of housing demand," said Richard Cho, principal of market analysis for CMHC.

"We've also seen an increase in rental supply in the market as well. That's also contributed to a rise in the vacancy rate."

Calgary's apartmentvacancy rate has risen for the last three years. InOctober 2015, therate was 5.3 per cent.

Historically, Calgary's average vacancy rate is close to 3 per cent, Cho said.

The report states the number of purpose-built rental units increased by 1,296 units from the previous year, to 36,523 units the strongest year-over-year gain since 1994.

The number of new units has pushed the vacancy rate up, even as the number of occupied rental units has increased.

Rental demand has been helped byinternational migrants moving to Calgary, as well as some renters delaying home ownership,the report states.

The rise in vacancy rate has put downward pressure on rents.

"We're seeing more incentives being offered as well as rents being cut," Cho said.

The average two-bedroom rent was $1,258 per month in October 2016, compared to $1,332 a year earlier.

Paola Durante and her husband signed a lease for their one bedroom apartment in June of 2015.They didn't have to a pay a security deposit, but now they're wishing they got a better deal.

"I've seen this exact same apartment going for like $200 less than what I pay, which is a big difference," she said.

Durante said the company they rent from isn't flexible about lowering the rent for tenants that already have a signed lease, so she's been looking elsewhere.

"I've walked around, I've looked online, you can get a really nice apartment downtown for about $800, $900."

The other major Canadian centres with the highest purpose-built rental housing vacancy rates are Saskatoon (10.3 per cent), St-John's (7.9 per cent), Edmonton (7.1 per cent) and Saguenay (7 per cent).

Canada's purpose-built rental vacancy rateincreased slightly, to 3.4 per cent from 3.3 per cent in October 2015.

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