A sharp population increase meets a strained housing market
In Edmonton, more residents are opting to rent instead of buy homes, spurred by escalating inflation and a steadily increasing population. The demand for rental units has surged to a point where the city now reports its lowest vacancy rates in nearly ten years.
The latest figures from Canada Mortgage and Housing Corporation (CMHC) reveal a striking decrease in the availability of rental apartments, with the vacancy rate plummeting to 2.4% in 2023, down from 4.3% just a year earlier. This tightening of the rental market is largely due to a combination of economic pressures and demographic changes, including a notable influx of immigrants and a shift in housing preferences amid soaring mortgage rates.
"Alberta is attracting people from various places, not just internationally but also Canadians moving from other provinces. With the cost of homeownership becoming increasingly out of reach for many, we're seeing a significant number of individuals and families turning to the rental market,” said David Dale-Johnson, real estate expert from the University of Alberta.
Adding to the complexity of the issue, CMHC lead economist Taylor Pardy points out that while there's a slight increase in rental unit construction, it's hardly enough to meet the growing demand.
"Currently, the rental system is being affected by a range of factors of higher demand from economic growth and population increases—including students—and the availability of supply," Pardy said in a statement to CBC News.
This shift towards renting is having tangible effects on the cost of living in Edmonton, with rental prices creeping upward. The average cost of renting a two-bedroom apartment in Edmonton has risen by 6.4% in 2023, pushing the monthly rate to nearly $1,400. Edmonton-based real estate agent Monica Kumar attributes the cost of building supplies, a labour shortage in the construction industry, and high interest rates for the positive shift towards renting.
According to the Realtors Association of Edmonton, the Greater Edmonton area had about 4,500 residential homes for sale last month, including around 2,200 new listings. Of that inventory, 1,439 homes were sold at an average price of $399,000.
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