Edmonton Vacancy Rate on the Rise

by Sheldon Johnston and Sara MacLennan on 10. Jun, 2009 in Edmonton Real Estate Market, Investing in Alberta Real Estate, Tips for Home Owners

Canada Mortgage and Housing released its Spring Rental Market Report today. Highlights:

  • The average apartment vacancy rate in Alberta's urban centres increased from 2.9 per cent in April 2008 to 4.6 per cent in April 2009. All centres except Grande Prairie reported a higher vacancy rate in 2009.
  • The 2009 vacancy rates ranged from a low of 1.2 per cent in Cold Lake to a high of 8.5 per cent in Grande Prairie.
  • Calgary and Edmonton, the two largest urban centres, reported vacancy rates of 4.3 and 4.7 per cent, respectively.
  • The provincial average rent for all unit types was $962 per month in April. At $2,088, Wood Buffalo had the highest average monthly rent amongst all urban centres in Alberta, while Medicine Hat had the lowest average rent at $654 monthly.

Sprin09Vacancy Spring09Rent

del.icio.us Digg

6 Responses to “Edmonton Vacancy Rate on the Rise”

  1. Andrew 10. Jun, 2009 at 3:17 pm #

    Too bad they don’t publish inventory stats from one year to the next, would be interesting to know if the number of units increased or if the number of tenants went down.

  2. John 10. Jun, 2009 at 3:50 pm #

    Too bad you don’t actually bother reading the report before making statements about its content. LOL

  3. Andrew 10. Jun, 2009 at 4:51 pm #

    I did read it, figure 1.1.3 shows current inventory, but while the report compares vacancy and availability year over year it doesn’t show what the total inventory was last year versus the total inventory last year, i.e. the total number of apartments.

    I did find it by referencing last years report though and the total number of rental units has decreased from 63390 to 60010 meaning vacancy is higher on a lower number of apartments, so the total number of renters is down more significantly then just the vacancy rates would indicate.

    Next question is where did they go? We know population increased so are more people sharing accommodations? are they renting houses (report just covers apartments)? Did they buy? (sales figures don’t support that unless most of the sales in the past year have been to new buyers as opposed to existing owners).

    The decrease in total apartments isn’t a surprise, as in the good old days you could buy a home/apartment building and have the rent pay your mortgage and expenses while you built equity; now you can see a three bedroom unit would get you %978 in rent 95% of the time, this might cover a 140K mortgage after you pay property taxes/maintenance on a property. Anyone want to sell me a three bedroom anything for 140K :) . So it makes more sense to sell (assuming you bought at current prices). We’ve seen many apt. buildings go condo over the past few years due in part to this equation.

  4. DaBull 10. Jun, 2009 at 6:37 pm #

    Here is one for you and only $129,000.00

    http://www.berniekrec.com/Edmonton/Alberta/Condos/Patricia_Heights/Agent/Listing_2440486.html

    Lots of 3 bedroom apartments out there under $140k

    Sorry Sheldon and Sarah, couldn’t post a link from you findedmontonhome site.

  5. Andrew 10. Jun, 2009 at 7:27 pm #

    Assuming Patricia Heights would get the average Edmonton rent of $978 condo fees are the deal killer. So my mortgage (0 down/4.25) is $700, condo fees are $355 taxes are 100/mo. So I am building equity but paying $1155 a month, add 5% to compensate for the vacancy and I am at $1230 plus any maintenance.

    By contrast in 2005 I purchased a home similar to, and down the street from this one, for about 129,000:
    http://www.edmonton-homes.ca/Edmonton/Alberta/Homes/University/Ritchie/Agent/Listing_2848882.html

    And no condo fees :)

    Point taken there may be a few apartments at that price, but most aren’t attractive investments to me (and others judging by the DOM of some of those).

  6. John Bid 10. Jun, 2009 at 9:01 pm #

    I suppose many of us have lost in equity since the downturn in real estate though.