Western Canada’s major markets are seeing significantly lower rental housing vacancies, a development largely impelled by recovery in the oil sector, CMHC figures indicated.
In Alberta, vacancies fell from 7.5% in 2017 to 5.5% in 2018, according to the CMHC. In Saskatchewan, the shrinkage during the same time frame was from 9.3% to 8.7%.
The oil price crashes of the past few years have been blamed for the loss of more than 40,000 jobs in the region.
Boardwalk REIT chairman and CEO Sam Kolias noted that Western Canada’s relative affordability is helping lower vacancies further. Average monthly rents for occupied units under Boardwalk stood at $1,138 – considerably lower than the $1,199/month just before the major petro crashes from 2015 onwards.
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Weaker residential purchase volume is also playing a significant role, as renters are refraining from buying homes due to remaining signs of economic uncertainty, as well as recent interest rate hikes and stricter mortgage stress testing.
Earlier this month, the Calgary Real Estate Board reported that the city’s February home sales declined by 10% annually, while the average price fell by 6.5%. In Edmonton, year-to-date sales for all residential asset classes shrunk by 11%.
“Calgary and Edmonton now have some of the most affordable rents in the entire country. Five or six years ago, we had the exact opposite situation, where our rents were one of the highest,” Kolias told The Canadian Press.
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