It was the sweet words from provincial officials that proved a lovely treat for investors with the reiteration that they will not implement any form of rent controls in the market.
Despite the protests of angry renters, Housing Minister Ray Danyluk has repeatedly dismissed the option of limiting rent increases on that basis that the government does not want to interfere in the free market. However, Danyluk added he would bring the plight of some renters to the government.
“This issue arises every so often in Alberta and to be honest, I don’t see the government getting involved in the rental market any time soon,” says seasoned investor Greg Head. “Such a move would simply discourage people like me entering the Alberta market.”
The high rate of migration to Alberta has naturally impacted the rental market there, with a net flow of almost 50,000 people in 2012. The region’s high wage rate is proving the main catalyst for such growth. According to StatsCan’s latest payroll survey, the average wage hit $1,117.58 per week in August, some $8 per hour higher than Price Edward Island, for example. On a year-over-year basis, average rents for a two-bedroom apartments in Calgary increased by 7.2 per cent from April 2012 to April 2013.
“While I understand the plight of many renters now, we have to look at the other side too. Who protects the investor when the market crashes? Does the government? No,” Head tells CREW. “I was getting $1,900 per month in 2005 for a half side of a duplex. In 2009, I was getting $1,100. No one helped me when the market dipped.”
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