The vacancy rate in Calgary is on its way down, according to a new report.
A report on multi-family real estate by CBRE Group says that, after increasing for three consecutive years, the apartment vacancy rate in Calgary went from seven per cent in 2016 to 6.3 per cent in 2017.
“The rise in rental demand outpaced the number of new purpose-built rental units added to the market, showcasing signs of improvement in Calgary`s economy,” said CBRE.
The real estate services and investment firm said that year-over-year average rents decreased by 1.6 per cent, following a 7.6 per cent decrease from 2015 to 2016.
The report also found that Calgary’s new multi-family home market experienced a 69 per cent increase in units sold in the fourth quarter of 2017 compared to the same period in 2016.
It said new mortgage rules “contributed to an increase in buyer urgency, which increased sales at the end of 2017. The majority of purchases in 2017 came from younger, price-sensitive buyers seeking product with a purchase price of less than $350,000 in the outer submarkets.”
“Due to improving economic conditions, there has been an increase in demand for rental units in Calgary,” added CBRE. “Number of occupied units in the city increased by 1,800 units years-over-year. Overall, supply in the apartment rental market demonstrated strong gains in 2017. There were 1,637 units brought to the market year-over-year, which contributed to the year-end total of 38,160 units of inventory.
“The most notable increase in supply was to two-bedroom units, with 997 new units added to the market, followed by one-bedroom units, which added 550 units,” the report said.
““Consumers are attracted to purpose-built rentals due to their lower price point, shorter-term commitment and rental incentives. In comparison to a multi-family purchase, tenants are typically only locked in for a one-year contract and experience lower fees due lower security deposits and lack of condo fees. Calgary has been experiencing an increase to rental incentives in the form of reduced parking rates, free-rent and move-in bonuses.”
Mario Toneguzzi is a veteran Calgary-based journalist who worked for 35 years for the Calgary Herald in various capacities, including 12 years as a senior business writer.
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