Press Release for Immediate Distribution.
New Record set for Empty Rental Homes in Major Alberta centres.
Private landlords in Edmonton and Calgary continue to suffer as current inventory of vacant rental listings remains highest on record.
Calgary, AB - The rental market in Alberta?s major centres continues to suffer. The number of rental properties currently on the market in Calgary is 8102 and the average number of days on market (DOM) is 68. Edmonton has 5211 available rentals with an average DOM of 59. These properties include all types of rental houses, apartments, and condominiums. They include a mixture of properties that are currently occupied and advertised, and those properties that are vacant or unoccupied. Market research conducted by the writer suggests that of these advertised rental properties; 37% or 2998 of Calgary?s rental properties are vacant (defined as properties that are unoccupied unintentionally) and 0.7% are unoccupied intentionally (for such reasons as renovations, etc). Edmonton?s 5211 advertised properties are comprised of about 21% or 1094 vacant properties, and about 1.8% or 94 homes that are intentionally unoccupied. These numbers differ significantly from the CMHC published rates because CMHC?s rates are based on the entire stock of rental homes in any given market, not based on total listings that are currently being advertised, which is the metric contemplated in this paper. The research seems to suggest that at the current time, Edmonton?s landlords are experiencing less of a decline than Calgary landlords. Historic data compiled by the writer?s research suggests that the situation, while still alarming, was not as dire for private landlords in the province 1 year ago. October 2015 saw 5233 homes available for rent in Calgary with an average DOM of 41 while Edmonton saw 3820 available rental homes with an average DOM of 37. Evidence compiled on a ?best guess? basis shows significant differences to Alberta's rental market of 5 years ago - fall 2011 saw 2377 available rentals in Calgary and 2700 available in Edmonton.
We have compiled the average current asking rental prices of various home types offered by private landlords in Alberta's major centres.
Average Rental List Prices for Calgary:
House (3 bd or less) $1521
1 bd Condo $1092
2 bd Condo $1246
Executive home (3 bd or more) $2131
Average Rental List Prices for Edmonton:
House (3 bd or less) $1329
1 bd Condo $971
2 bd Condo $1010
Executive home (3 bd or more) $1541
Now by applying rational figures of vacant and unoccupied homes, we are able to conclude that 2998 (or 37%) of Calgary?s available rental listings are empty, and these homes show an average rental rate of $1477, therefore private Calgary landlords are loosing $4,431,044 per month or $147,700 per day - based on the current economic climate and rental market. Edmonton?s private landlords are also adversely effected by the current climate showing a monthly loss of $1,277,792 which translates to a daily loss of roughly $42,600 - however these losses are much less severe than the city?s counterpart to the south.
The statistics contained in this report are primarily focused on rental data for private landlords. For the purposes of this report, ?private? landlords may be defined as persons who own 1 - 3 residential rental properties which may include some portion of their primary residence such as a laneway suite, basement rental apartment, etc. The private landlord does not employ any other person in a conventional employee relationship wherein payroll deductions are made and a bonafide property management job description exists. Conversely, the private landlords surveyed overwhelmingly hold outside, full time, employment and treat their real estate investing as a part time pursuit. The data compiled by government and large institutional research firms is largely based on CMHC data that contemplates an institutional base of rental properties that are expressly purpose built, including large public companies, REIT?s, firms whose corporate agenda relates to the acquisition and management of residential rental property. For reasons involving economies of scale, the properties are generally high rise apartment buildings and other large multi-family developments (i.e. town house complex) wherein, an argument could be made that differing degrees of demand exist from those properties owned and managed by private landlords on a micro level.
According to Shamon Kureshi, Hope Street?s President & lead researcher, ?Times are hard for every single Landlord with whom I?ve spoken in the past 8-12 months. Empty rental properties abound and no obvious solution to the province?s empty rental property phenomenon exists.? However, Kureshi went on to say, ?Alberta has a decidedly ebb and flow type of economy which has faced several shocks in the past decade and this current climate is no different. These shocks rarely last for more than a year or two.? Looking forward, Kureshi and his team are of the opinion that good deals on rental property abounds in the province due to the slumping oil and gas sector bringing down the rental demand in the short term, added to an oversupply of new product brought online by Alberta?s busy building industry. This report was compiled by the team at Hope Street Real Estate Corporation and was primarily based on raw data from Hope Street?s rental operations in the past 90 days, along with data from cooperating ILS (Internet Listing Sites), interviews with stakeholders, and anecdotal data.
Hope Street Real Estate Corporation is an industry leading team of property management professionals serving Edmonton and Calgary. Hope Street is comprised of about 50 team members and directly manages the tenancies of 3600 people in Alberta?s major centres or surrounding communities.
For media inquiries:
Shamon Kureshi, President & CEO
Hope Street Real Estate Corporation