Calgary’s purpose-built rental market is showing positive signs of recovery with an increased occupancy rate despite the continued introduction of new rental supply in 2020, says a new report by research firm Urban Analytics.
“Both rents and occupancy rates are now higher than what was recorded when the pandemic was announced in March 2020. Average rents have decreased by one per cent ($0.03 per square foot) and occupancy rates have increased by one per cent when compared to the same quarter last year,” said the company’s Q1 2021 report.
“UA anticipates that these positive trends will continue throughout the year as the nation works towards achieving immunity against the COVID-19 virus and the economy fully re-opens.”
UA is currently monitoring 88 newer purpose-built rental apartment projects comprising 11,154 units across seven Calgary sub-markets – 18 of these projects are actively leasing (under 85 per cent leased and within the first year of their leasing campaign), with the remaining 70 buildings having been substantially absorbed and experiencing typical levels of unit turnover.
It is also currently monitoring 109 development permits (26,202 units) that have been submitted to the City of Calgary. There are currently 39 apartment buildings under construction that will bring 7,636 units to Calgary within the next two to three years when completed. UA anticipates that 22 of these buildings will be ready to commence leasing in the next one to two years, which will add over 5,297 new rental apartment units to the market.
“The overall occupancy rate for newer rental apartment buildings in Calgary was 88 per cent at the end of the first quarter of 2021, which is a four per cent increase from last quarter and a one per cent increase from the first quarter of 2020. The positive trend set by the last two quarters of 2020 has continued into the first quarter of 2021. Four new projects were launched in Calgary in the first quarter of the year, which added 150 new rental units to the market. The increased occupancy rate relative to the previous quarter indicates that new rental project launches have had minimal impact on overall averages” said the report.
“Average per square foot rents for newer purpose-built rental units increased by six per cent from the previous quarter ($0.11 per square foot) to $2.03 per square foot. Excluding the Airdrie and Cochrane sub-markets, average rental rates in Calgary were $2.14 per square foot which is four per cent ($0.09 per square foot) higher than last quarter.”