Apartment vacancy rates climb amidst economic downturn

Signs of Alberta’s economic downturn are showing up in rental markets.

Signs of Alberta’s economic downturn are showing up in rental markets.

The average apartment vacancy in the province’s major centres was up to 3.4 per cent in April, compared with 1.8 per cent a year earlier, according to the latest Canada Mortgage and Housing Corporation report.

Red Deer has fared a little better with vacancies only climbing a modest 0.3 per cent to 2.4 per cent over the same period.

Sylvan Lake’s vacancy rate jumped to 8.3 per cent from 3.7 per cent a year earlier, according to the report. Lacombe went up to 2.8 per cent from 1.6 per cent.

In Wood Buffalo, which serves the oilsands, the vacancy rate soared to 22.3 per cent, compared with seven per cent in April 2014. CMHC attributes the increase to declining employment in the region.

Cold lake (22.8 per cent) had the highest vacancy rate in April. A year-to-year comparison was not available.

“Alberta’s slowing economy has attracted fewer migrants as the demand for labour in the oil and gas industry has moderated,” says the CMHC. “Total net migration was down by more than 6,500 year-over-year in the fourth quarter of 2014.”

While employment was up 2.3 per cent, many of the jobs were part-time, says the report.

Also adding to higher vacancy rates was an increase in housing supply in the last couple of years.

Alberta-wide, 115,678 units were available in April, compared with 112,602 the previous year.

Average apartment rents have continued to climb. Alberta-wide, the average of bachelor, one-, two- and three-bedroom-plus apartments increased to $1,138 from $1,089 for communities with more than 10,000 people. Overall, rents increased 5.3 per cent year-to-year for comparable units.

Red Deer’s average rent increased to $959 from $892, Lacombe $782 from $767, and Sylvan Lake $975 from $889.