Low supply, high migration to Calgary pushing rental market to max: experts
Posted Jan 9, 2024 3:25 pm.
It’s only going to get more difficult to find a place to rent in Calgary over the next couple of years.
Experts are warning that low supply and high migration means vacancy will continue to drop, while prices go up.
As flocks of people continue to land in Calgary, the city’s vacancy is expected to hit a record low of 1.2 per cent by 2025, pushing rent even higher after the 13.6 per cent increase seen between 2022 and 2023.
Justen James, research advisor with real estate tracker Zonda Urban, says about 5,000 rental units are expected to be created in Calgary in 2024, which he says is good compared to years’ past, but still won’t keep up.
“We also have the new influx of net inter-provincial migration, from Ontario and B.C specifically — the bigger metropolitan areas which are just generally unaffordable,” he explained. “It’s basically impossible for the supply to match the incoming demand.
“I’m not even sure if all red tape was peeled back and you were basically allowed to build whatever you want, wherever you want, if it would keep up.”
Related stories:
- Calgary home sales outpace long term trends in 2023 as migration fuels demand
- Calgary one of top Canadian cities in EIU livability index
- Calgary home prices set to increase again in 2024: Royal LePage
Meanwhile, Taylor Pardy, economist with the Canada Mortgage and Housing Agency, says even though the city adopted an aggressive housing strategy last year to increase supply, they’ll have to act quickly to respond to the mounting pressure.
“Right now with this situation we’re in, where we have this really strong migration into Calgary at the same time as we have higher mortgage rates making it more difficult to get into ownership, it’s just adding more pressure on the rental side,” he said.
Calgary is the most desirable Alberta city to live in, according to Pardy, which also contributes to migration.
“Between the third quarter of 2022 and the second quarter of 2023, we had almost 169,000 people move to Alberta with a good chunk of those landing in the Calgary area,” he said.
Pardy says this weighs heavy on renters, who are already being hit hard with increasing rent prices.
“Really the biggest thing is we do anticipate rent to continue to increase that we haven’t really seen since the mid-2000s,” he explained.
However, both Pardy and James say the city’s approach will eventually pay off in a more stabilized market.
