New rental market sees falling vacancies, rising rent prices

Demand increased in first three months of year, Zonda Urban report finds

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The city’s new rental market continues to find strong demand with the economic recovery underway as vacancy falls and rents rise, a new report has found.

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Zonda Urban recently published its first quarter report for 2022 (January, February and March) showing vacancy rates fell to 5.7 per cent, the lowest figure in the past four years, and down from 7.8 per cent at the end of 2021.

At the same time, rents per square foot increased to $2.27 in the first quarter from $2.22 at the end of last year.

In turn, the average cost for a new one-bedroom, wood-frame rental apartment in Calgary was $1,536 at the end of March, and $1,717 for a new concrete apartment of similar size.

The report noted despite concerns of over-supply in the new rental market in the city due to steady launches of new projects, stronger migration driven by the economic recovery coming out of the pandemic has helped boost demand for the new rental market.

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Zonda Urban tracks 115 projects in Calgary, comprising of more than 14,200 units, with 103 projects fully leased. Only 12 are actively leasing, including five new projects that launched in the first quarter of this year, adding 333 new units to the market.

The report also forecast rental demand to remain strong for the rest of the year with several new buildings expected to launch adding new units to the market.

Even with supply rising, Zonda Urban pointed to anecdotal evidence from leasing agents, who are seeing increased traffic from prospective renters particularly among young professionals and new arrivals finding employment opportunities as Alberta’s economy rebounds amid higher energy prices.

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