Landlords struggle to draw tenants

The pool of prospective tenants are drying up in Calgary as a tough job market is forcing some to reduce rents in response – and the situation could worsen as tenants leave the market for good.

“People are having to break leases, which is making it tough for landlords," said Bill Blake, a landlord and member of the Alberta Landlord Association.

"There are always ebbs and flow, 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.

“More and more landlords are preparing for the reality that their units could be vacant for a month or two before finding someone qualified.”

The comments reflect a difficult situation taking place in Alberta with the effects of low oil prices, which has created a tough situation not just for homeowners, but people’s job prospects as well with many energy companies forced to layoff employees.

The once-hot housing market has cooled down considerably, especially in the last couple of months, with huge layoffs announced from large energy conglomerates such as ConocoPhillips, Nexen Energy and Talisman Energy Inc.

Just last year, Blake said, some were raising renst by 20 to 30 per cent year-over-year.

Now with many tenants breaking their leases and moving out of the province altogether, it’s created a troublesome and uncertain picture for landlords.

Last year, the vacancy rate 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, but that figure could climb to more than two per cent as rental market trends point to a change.

“There are good and bad times, and this is one of those moments," said Blake. "As a landlord, you have to be prepared and plan for this during the good days so that you can outweigh the bad.” 
 

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COMMENTS

  • by Don R Campbell 2015-06-09 1:47:12 PM

    We are finding the opposite. There seems to be more people in the 'renter' pool than the buyer pool right now. And in fact "street rents," for quality properties, have been inching upwards as ads are drawing more calls. (Both in Edmonton and Calgary)

    In the smaller centers (Grande Prairie , Ft Mac etc) it has become more difficult to fill vacancies, but well maintained properties are having little issue.

    This may explain why this phenomena is occurring:

    6 Factors Why Calgary’s Real Estate Market Hasn’t Collapsed and rental Market remains strong http://www.donrcampbell.com/6-factors-why-calgarys-real-estate-market-hasnt-collapsed

  • by Keith 2015-06-09 1:48:46 PM

    If a landlord has a hard time finding tenants in a 2% vacancy market then the problem is likely how poorly written their ads are, how they treat tenants or the condition of the unit, not a lack of tenants. A 2% vacancy rate is nothing to cry about. We still have a lot of migration coming to this province. Many landlords are willing to ride the high and save nothing or spend nothing to maintain or improve a rental. If they choose to manage that way it helps make my rental that much more desirable.

    All of our tenants are our customers and we treat them like customers. That builds loyalty and trust.

  • by Terrance Brennan 2015-06-12 3:10:07 PM

    While there is no doubt a contraction in the Oil Industry is going to have an impact in certain sub-rental markets in Calgary. The broader question might be is this (miniscule) slack going to be picked up with people retreating from mortgages in favor of rental accommodations?



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