Calgary rent prices are experiencing an increase not seen in several years. According to data from the rental app Zumper, rent has risen at least 18% since last year. Right now the average monthly cost is $1,388 for a 1-bedroom apartment in Calgary and $1,578 for a two bedroom. Here’s what experts say we can expect in the coming months:
Migration & Inflation
Rising rent is the difficult side effect of our current economic circumstance, but there are positives. The province’s budget forecasts a falling unemployment rate. The Alberta government believes we can expect our economy to grow by 5.4% by the end of 2022. We’re leading the country in average salary. Calgary had the highest average pay of all major Canadian cities in 2021.
Alberta’s net migration is up and expected to increase; we are leading the country in inbound population growth for the first time since 2015.
Some of that is because of affordability relative to other larger cities in the country, and that’s an advantage to us,” Ann-Marie Lurie, Chief Economist at the Calgary Real Estate Board (CREB), told Toronto real estate website STOREYS.com.
Recently the Governor of the Bank of Canada told Canadians to brace for this higher-than-expected inflation to continue due to the war in Ukraine and increased commodity prices.
The cost of living increase is making circumstances difficult for people who were already struggling to pay their rent and now face not only increasing housing prices, but increased prices on virtually everything.
Climate Change Increasing Landlord Expenses
Rent increases are at least partly due to increased expenses for landlords.
Alberta’s average home insurance rates have gone up a whopping 140% in the past decade. One major reason for this is climate change. Industry experts cite last year’s tornados in Barrie, the “atmospheric river” related flooding in November 2021 in B.C., as well as the Alberta hailstorm of June 2020 as examples of climate change in action. The increase in extreme weather events pushes insurance premiums higher.
“Everyone should be motivated to take action on climate change, but this data should add even more incentive by putting a clear dollar value on the costs of inaction,” says the editor-in-chief of RATESDOTCA Jameson Berkow in an interview with Insurance Business Magazine.
Another factor affecting landlord expenses is the increase in utility costs. The same increase in commodity prices helping to reinvigorate Alberta’s oil sector also results in higher gas and electricity prices for consumers. Alberta once had a set limit on utility prices for homeowners, but the current government eliminated that price cap.
Vacancies Affect Calgary Rent Prices
According to Rentals.ca’s annual Rental Market Predictions Report, vacancy rates in Alberta’s largest cities are decreasing. Vacancies in Calgary are at the lowest level since the fourth quarter of 2019, at an overall average of 5.7%, the lowest level since before the pandemic.
This infographic will give you a sense of how the rental market is looking in Calgary right now.
