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Renters in Calgary catching a break

Renters in Calgary catching a break

Posted on: 9/5/2017 | Author: ATB Financial's Economics + Research Team

One predictable outcome stemming from Alberta’s recent economic downturn is the falling price of rental accommodations—a benefit to the renter, but a cost to the landowner. The latest data from the Consumer Price Index show that renters in Alberta’s two major cities might be getting a break, especially Calgary.

The rental accommodation price index includes three separate items: the actual rent, the tenants’ insurance and tenants’ maintenance costs. With an index of rental costs in 2002 set equal to 100, the index of rent in Calgary stood at 125.2 in July of this year, while in Edmonton it was 139.9.

Edmonton’s higher index value doesn’t mean apartments cost more to rent in that city. It only means that since 2002, rents in the capital city have risen by a greater amount (about 40 per cent) than they did in Calgary (about 25 per cent). Rents in Calgary in 2002 were likely already higher than they were in Edmonton.

Apartment vacancy rates have risen over the past few years—and that’s putting some pressure on landlords to drop their prices. Rent appears to be coming down more quickly in Calgary than they are in Edmonton—consistent with the fact that Calgary has a lot of new multi-family residential projects coming onto the market, particularly downtown. It is a classic case of supply-and-demand. In the case of Calgary, the supply of apartments and vacant condominiums is currently outweighing the demand.

Rental accomodation price index, graph

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