Jul 30, 2013, Rental market worries rise

In Calgary’s increasingly tight rental market, some landlords have stopped advertising widely because they are routinely flooded with responses from eager, hopeful tenants.

And there are concerns the competition could grow even fiercer as apartment buildings remain uninhabitable following last month’s flood and university students return to classes.

Tammy Panchuk, who owns 40 rental units with her husband, said they don’t have any vacancies now, and when there are openings they advertise on only one website because the inquiries become “overwhelming.”

Calgary is now among the fastest-growing cities in North America, according to new

civic census data released this week, and Panchuk expects the narrowing rental market will force many would-be renters to buy instead.

“I deal with a handful of investors,” the Calgary real estate agent said, “and none of them have any vacancies whatsoever, and if they do they are snatched up just like that.”

Mount Royal University’s student union is expecting a big housing crunch when students return to the city and begin looking for apartments, likely in early August.

“Given how many people that have been displaced due to the flood and are renting, costs can only go higher and rental space is limited,” said Tristan Smyth, a vice-president with the student union.

“Not just Mount Royal, but having the (University of Calgary) students and SAIT students coming back, it’s definitely going to hit the Calgary community,” he said.

Mayor Naheed Nenshi also expects a worsening rental market in September, and even predicted this week that the rental vacancy rate could come close to zero because of last month’s big flood.

Calgary and Edmonton had the lowest vacancy rate of any major Canadian city in April, at 1.2 per cent, according to the Canada Mortgage and Housing Corp. Calgary rents jumped by more than seven per cent over a 12-month period, the biggest annual rise in Canada, as the average rent for a two-bedroom apartment reached a record $1,202, CMHC reported.

The organization is still tallying the impact June’s devastating flood, among other factors, has had on Calgary’s rental market and plans to release a fresh report next month. However, the predictions are bleak.

“With more people looking for places to rent, especially those who are displaced temporarily from the flooding, we’re expecting to see more pressure on the rental market,” said Richard Cho, senior market analyst with CMHC’s Calgary branch.

Gerry Baxter, executive director of the Calgary Residential Rental Association, said the market would likely tighten over the short term as some apartment owners struggle to reopen their properties.

Baxter stressed that most apartment dwellers who were initially displaced by the flood have been allowed to return, but others are not so lucky. He said the officials who own the still-shuttered buildings face a daunting task.

“The ones I’ve spoken to are working as hard as they can to get them back online as quickly as they can, but in some cases it’s a mammoth undertaking because some of the buildings suffered very significant damage,” Baxter said. “Some of them may be out of commission for who knows, another month. Some may even be months away just because of the damage they sustained.”
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