Rent prices are one of the most important issues for landlords and tenants alike. And in the current context of the Canadian real estate market, it is more important than ever.
We want to start talking about rent prices in Calgary addressing one of the most common questions owners and renters ask themselves: “how do rent prices in Calgary compare with other major Canadian cities?”.
Rent Prices from a Landlord’s Point of View
Before we start talking about actual numbers, we need to understand that both tenants and landlords have different concerns about rent prices in Calgary. Having that said, let’s talk about the landlords’ perspective.
When a landlord in Calgary has to set a rent price for their property, they need to keep in mind some of the following factors:
- Property location;
- Type of property (house, condo unit, townhome);
- Property market value; and,
- Their business plan.
If you are a new rental property owner, our advice is to take a percentage of your property value somewhere between 0.8% and 1.1% of its value and use that as your base number for monthly rent. Then, think about other factors included in your business plan, such as projected revenue, business expenses, and possible macroeconomic changes.
This won’t necessarily tell you the exact rent price you should charge in Calgary, but it’ll give you some key information to set the best price for your property. If you need more assistance, don’t hesitate to contact us.
Rent Prices from a Tenant’s Point of View
Now, let’s explore what are the things that tenants look for in terms of price when they’re in the market for a new rental home to live:
- Location;
- Safety;
- Lifestyle: for example, if they’re going to live alone, with a pet, or with family members. Their work is also an important factor to consider.
- School districts are in the area;
- If they plan to settle in the area they’re considering, or if they want to keep the flexibility of a shorter lease, and,
- Their budget.
Now that we’ve given a brief background to rental rent prices, let’s discuss the current situation with rent prices in Calgary.
Calgary Rent Prices Over the Recent Years
According to the official Government of Alberta website, an average residential rent in Calgary was priced at $1,347 in 2021, showing an annual change of 2.18% from 2020. The table below shows in more detail a comparison in value of different types of rental properties in the city:
| Unit type | 2020 | 2021 | YoY change |
| 1 – bedroom | $1,066 | $1,082 | 1.52% |
| 2 – bedroom | $1,319 | $1,347 | 2.18% |
| 3 – bedroom | $1,424 | $1,467 | 3.02% |
| Bachelor | $883 | $921 | 4.23% |
As of the first half of November 2022, the average rental price for a 1-bedroom apartment is $1,500, showing a considerable increase from 2021. In Calgary’s case, the bachelor units had the largest price increase.
With this data we can conclude that yes, rental prices in Calgary are soaring. This is due to many complex factors currently at play, including the constant shifts in housing prices, inflation, higher interest rates, and the possibility of a recession in 2023.
Now, let’s take a look at how rental prices are averaging in major other cities compared to Calgary.
Rent Price Comparison: Calgary Vs. Other Major Canadian Cities
Edmonton
The provincial data shows us that an average residential rent in Edmonton was at $1,347 last year, with an annual change of 2.18% from 2020. The table below gives us the detailed comparison in price behaviour for the other popular properties:
| Unit type | 2020 | 2021 | YoY change |
| 1 – bedroom | $1,027 | $1,037 | 0.97% |
| 2 – bedroom | $1,266 | $1,274 | 0.61% |
| 3 – bedroom | $1,389 | $1,409 | 1.42% |
| Bachelor | $874 | $866 | -0.94% |
In contrast to Calgary, the 3 -bedroom units were the ones with the highest price increase. As of November 2022, a single bedroom unit has an average rent price of $998 (8% YoY change.)
Toronto
Toronto’s rental increase trend is no different than Calgary and Edmonton. The data below show Toronto’s rental pricing behaviour over the last few years:
| Unit type | 2020 | 2021 | YoY change |
| 1 – bedroom | $1,374 | $1,431 | 0.04% |
| 2 – bedroom | $1,591 | $1,661 | 0.04% |
| 3 – bedroom | $1,766 | $1,896 | 0.07% |
| Bachelor | $1,148 | $1,211 | 0.05% |
The small variation from 2020 from 2021 can be partly explained by the fact that many Torontians chose to leave the city looking for homes with more space during the pandemic, resulting in a vacancy rate increase. Now, with people getting back to the city and the soaring housing prices, rentals have begun to rise. As of November 2022, a 1 – bedroom apartment has an average rent price of $2,300 (24% YoY change).
Vancouver
Another reference point in rental prices is Vancouver, but unlike the case of Toronto, the city had a decline in the vacancy rate during the pandemic period. According to a CMHC report, this trend could be explained due to improved economic conditions and a faster recovery in student activity and migration than other major cities.
Let’s take a look at Vancouver’s rental prices in 2020 and 2021:
| Unit type | 2020 | 2021 | YoY change |
| 1 – bedroom | $2,059.50 | $2,021.83 | 0,01% |
| 2 – bedroom | $2,841.75 | $2,758.41 | 0,29% |
| 3 – bedroom | $3,540.41 | $3,552.58 | 0,003% |
| Bachelor | $1,723.08 | $1,718.08 | 0,002% |
Overall, the Lower Mainland experienced a year-over-year increase of +0.7%, and the Metro Vancouver Region specifically saw an increase of +1.9% in all purpose-built rental apartments, which could be considered a reasonable variation in a major city. However, rent prices in Vancouver have been increasing exponentially during 2022, and as of November 2022, a 1-bedroom apartment can be rented at an average of $2,488, showing a 18% yearly increase.
The Future of Rent Prices in Calgary and Other Cities
Is hard to predict the exact behaviour we’ll see in the rental prices in 2023. But with a scenario of inflation and the perspective of a recession in sight, we can tell that rental prices in Calgary and other major Canadian cities will be under high pressure from the beginning of the next year.
What we can do is start planning ahead. But both landlords and tenants should be working on their budgets to face the changes in rental prices in 2023. If you’re ready to start planning, whether it is to rent out your property or look for a new home, we can help you. Contact us to get a quote here.
