CMHC released their bi-annual report on the rental market in Edmonton yesterday showing decreasing vacancy rates and increasing rents. Increased net migration and job creation explain the changes to the rental market. The vacancy rate dropped from 4.2% in October 2010 to 3.3% in 2011.
The average monthly rent for a 2-bedroom apartment increased to $1,034 from $1,015 in October 2010. Edmonton rental rates were amongst the highest in Canada behind Vancouver, Toronto, Ottawa, Calgary ($1,084) and Victoria.
Bachelor suites reported the lowest vacancy rate at 2.7%. The area with the lowest vacancy rate this fall was St. Albert, at 0.5%, other relatively tight markets included the South West and Leduc, both at 1.2%. The University and Millwoods zones were also showing a low vacancy rate of 1.3%.
Edmonton rental market by area, Source: CM
With vacancy rates moving lower across the Edmonton region, fewer
landlords are offering incentives to lure new tenants and reduce turnovers - 25% of landlords offered incentives last October compared to 10% this year. This represents the lowest level since October 2008. Even though rents increased in the past year, affordability increased as well, since renter income grew at a faster rate than rents.
Apartment vacancy rates across Greater Edmonton decreased in 2011 thanks to improved demand associated with the growing economy and further reductions are expected in the coming year as the economy continues to expand. Supply of new rental units will not keep pace with the expected rise in demand in 2012. Improving employment, particularly among the younger age groups, will encourage more newcomers to the region. Rental rates will continue to rise in the months ahead. A typical two-bedroom unit will rent for close to $1,060 by the fall of 2012.