“I knew this was going to happen last October and I cringed initially when the mayor of Calgary
suggested that tenants are being gouged by landlords because the markets go up and down,” Bill Blake, president of the Alberta Landlord Association, told CREW
“People are having to break leases, which is making it tough for landlords. There are always ebbs and flows and landlords need to be prepared, but it’s a tougher time these days because the job prospects aren’t as readily available. Things are not terrible, but there’s been a definite change.”
The president’s comments reflect a harrowing picture for the Calgary market
as a tough job market has forced many tenants to break their leases prematurely. As a result, landlords are increasingly sidestepping tenants in the energy sector, which has mitigated the rental market to some degree.
Despite last month’s improvement in house prices, the second quarter benchmark price was 0.81 per cent below levels recorded last year and 0.93 per cent below first-quarter figures. Year-to-date unadjusted apartment averages continue to remain 1.65 per cent above last year’s levels.
The once-hot rental market has cooled down considerably, especially in the last couple of months with huge layoffs announced by large energy conglomerates, such as ConocoPhillips, Nexen Energy and Talisman Energy Inc. Just last year, Blake said, some were raising rents by 20 to 30 per cent year over year.
Last year, the vacancy rate in Calgary
was 1.4 per cent when the CMHC tabled a rental report in October 2014, while the average monthly rent for a two-bedroom apartment was $1,322 during the same period.
The housing corporation predicted a 1.6 per cent vacancy rate in 2015, which has held firm so far, but that figure could climb to more than two per cent as rental market trends point to a change.
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Calgary landlords are facing pressure to lower rents in what’s been a particularly tough period, according to new stats revealing the weakest absorption rate in years.