Tenants in Calgary are already seeing a decline in rental costs as vacancy rates continue to rise in Alberta.
The most recent quarterly assessment by the Canada Mortgage and Housing Corporation (CMHC) reports that vacancy rates in Calgary jumped to 5.3 per cent in December of 2015 from 1.4 per cent in 2014.
Kyle Beetstra, a senior piping designer at Upside Engineering in Calgary, has already seen his monthly rent cut by $400.
“I got laid off last summer, so I paid out to the end of my lease and left town for a while,” he said.
When he was called back to work several months later, he contacted his former landlord to ask if the Victoria Park apartment was still available.
His landlord informed him that the apartment had remained vacant since Beetstra’s departure five months earlier.
“I said to him, ‘you know, rental prices are dropping in the city,’ so [my landlord] asked me how much I wanted to pay,” he said.
Beetstra has heard similar stories from friends and co-workers, including about landlords offering incentives to potential renters, such as a rent-free first month.
The CMHC has partially attributed the rise in vacancies to a reduction in rental demand, as migrant workers move to regions with better labour market conditions.
“The evidence of overbuilding has increased since the previous assessment in Calgary, Saskatoon, Regina and Ottawa due to either higher vacancy rates, high inventory of new and unsold units or a combination of both,” CMHC Chief Economist Bob Dugan said in a media release.
“It’s because of all the layoffs,” Beetstra said. “People are fleeing town because of the high costs and going back home to Ontario or B.C. or wherever they’re from.”
The average listed monthly rent on an apartment in Calgary is currently $1,281 on RentFaster.ca, a website that advertises rental properties in Calgary and Edmonton.
The average cost last year was $1,486.
I said to him, ‘you know, rental prices are dropping in the city.'” – Kyle Beetstra
While lower rental fees may seem like good news to renters, homeowners like Karim Fawaz are already feeling the strain of Calgary’s problematic housing market.
Fawaz owns several condominiums in Calgary, two of which are currently empty, and he said he has had to lower his rates to remain competitive.
“I am barely covering my operating costs and I can’t go any lower,” said Fawaz.
“This is how I make my living,”