Canada Mortgage and Housing Corp.’s latest rental market report suggests that developers are responding to the scarcity of apartments in Alberta.
The report, which looked at vacancy and rental rates in April, found that an average of 1.8 per cent of apartment units were available that month. That compared with 1.5 per cent in April 2013.
“Between the 2013 and 2014 April surveys, the provincial rental apartments universe experienced a net gain of 1,274 units, which helped to offset increased demand,” said CMHC in its report. “Further additions to the rental market universe will occur in future surveys, as there were over 4,100 rental units under construction in April 2014.”
In Red Deer, the apartment count grew by 48 units year-over-year, although several additional buildings are under construction.
The overall vacancy rate in the city increased to 2.1 per cent from 1.6 per cent in the 12 months leading up to April. Among communities with 10,000 or more people, vacancy rates ranged from zero per cent in Canmore to 7.0 per cent in the Regional Municipality of Wood Buffalo. Sylvan Lake was at 3.7 per cent, up from 1.5 per cent; and Lacombe increased to 1.6 per cent from 0.4 per cent.
CMHC said apartment vacancy rates in Alberta have remained relatively low because of the influx of people to the province. Net migration last year involved a record 102,465 people.
Meanwhile, employment growth remained strong, with 76,300 new jobs created in Alberta between April 2013 and April 2014, and average employment jumping 3.5 per cent during this period. The high demand for rental accommodation continued to put upward pressure on rental rates.
The average rent for two-bedroom apartments that were included in both the 2013 and 2014 CMHC surveys was up 5.5 per cent.
In the case of Red Deer, the increase was 5.6 per cent, while in Sylvan Lake it was 2.9 per cent and in Lacombe it was 1.5 per cent.
The average rent for new and existing two-bedroom apartments in larger centres in April was $1,190 — ranging from $739 in Medicine Hat to $2,061 in the Regional Municipality of Wood Buffalo. In Red Deer, the average rent for new and existing two-bedroom apartments was $956, up from $902. Bachelor units jumped to $667 from $571, one-bedroom apartments went to $816 from $902, and apartments with three-plus rooms increased to $1,034 from $1,009. The average two-bedroom rent in Sylvan Lake in April was $921, as compared with $899 a year earlier. In the case of Lacombe, the figure went to $804 from $783.