2023 begins with great promise. Alberta has been a province of “highs and lows” for several decades. Currently we are enjoying the benefits of a strong economy with a quality workforce, a stable economy, and a promising year. The geopolitical situation in many parts of the world, with the War in Ukraine to the partial shutdowns in China has had a positive impact for us here.
Alberta appears currently to be one of the beacons of prosperity in Canada, and a net gain in this world situation. All the major macroeconomic indicators place Alberta, particularly Calgary in a strong light for good business and bright opportunity. Having that said, what can we expect in the Calgarian residential rental market in 2023?
2023 Looks Bright for the Residential Rental Market in Calgary
Prudent property managers are always looking at the macro-economic situation to foresee the year ahead. We realize Alberta has its cyclical swings which show the best and the worst every decade. We are currently in a good place with all the benefits of an “up” market. We hope this trend remains and continues to offer opportunities for steady rental real estate investments to continue to provide stable and growing returns.
In the residential rental market, there is currently a greater demand for rental property than we have experienced in several years, specifically single-family homes and townhouses. Rents being obtained currently are at a record high. For some, this has been the best rent increase cycle in over twenty years!
Wise residential property managers and property owners see this as a great opportunity, and are often caught in the dilemma of maximizing rent or optimizing rent without disrupting a steady tenancy situation. A knee-jerk reaction in these times may have the impact of losing the existing tenant and having to address re-leasing and other associated costs. This often needs skilled decision making.
Calgary Starts 2023 as a Renters Market
With the sharp increase in interest rates, home ownership for first-time buyers has been made more challenging and often, prohibitive. It has also forced many of them back into the rental market.
This compounded with the fact that Calgary is currently experiencing a large influx of immigration of skilled people from across the country and the globe, has increased demand for housing quite rapidly and is allowing residential landlords to command better rents for their rental property than in the past years. Is this an opportunity or a challenge?
In my opinion, this provides a great opportunity for long-term investors to purchase better quality middle class residential property and start or expand their rental portfolio. It currently offers a good yield and brings the investor an opportunity to diversify some of their retirement investments.
We are seeing many more entrants into real estate investment in Calgary. Many of these new entrants are non-Albertans that see Calgary as an affordable and desirable city in which to buy real estate.
Overall, the purchasing of residential rental property in Calgary is currently showing good activity and strong prospects all round. The city is showing positive signs of continued good rental market opportunity that allows for rent increases and encourages more entrants in the rental property market sector. If you have the capacity to buy real estate, residential single family and townhouse property is a sector to consider for medium to long term hold.
It is our observation that the current Calgary residential rental market is buoyant, steady, and strong for this new calendar year.
