The strengthening provincial economy is pushing apartment vacancy rates downward in Red Deer and other Alberta cities, a Canada Mortgage and Housing Corp. report concludes.
CMHC’s April 2011 rental market survey, the results of which were released on Thursday, found that average vacancy rates in Red Deer dropped 2.3 percentage points from a year earlier. The figure, for apartments of all sizes, went from 8.7 to 6.4 per cent.
The decline was most pronounced in the case of one-bedroom units, with the average vacancy rate in Red Deer dropping from 8.7 to 4.2 per cent.
The year-over-year decrease for two-bedroom apartments was 1.4 percentage points, declining to 7.9 per cent; and among three-bedroom suites the vacancy rate went from 5.5 to 3.8 per cent.
The trend was similar in other major Alberta cities.
The overall April vacancy rate in Grande Prairie tumbled from 14 per cent in 2010 to 5.5 per cent this year, in the Regional Municipality of Wood Buffalo the number slid from 13.2 to 6.2 per cent, in the Calgary metropolitan area the rate went from 5.3 to 3.4 per cent, in Medicine Hat the change was from 10.7 to 9.4 per cent, and in the Edmonton metropolitan area the number went from 5.2 to 4.7 per cent.
The year-over-year April vacancy rate for apartments in Lethbridge actually increased, going from 5.8 to 6.4 per cent.
“The reduction in vacancy is largely attributed to increased employment levels and recent gains in international migration,” said CMHC regional economist Lai Sing Louie in a news release.
The high price of oil was a key factor, said the release, pointing to Grande Prairie and Wood Buffalo as communities where increased drilling and oilsands activity have affected demand for rental accommodation.
Conversely, it added, Medicine Hat — where lower-priced natural gas is more prevalent — had the highest vacancy rate.
Among other Alberta communities with populations of more than 10,000, Sylvan Lake posted the highest April vacancy rate, at 22.1 per cent.
But this was skewed by a 27 per cent rate in the two-bedroom category, with one- and three-bedroom vacancy rates both coming in at zero.
Lacombe’s overall vacancy rate was also high, at 11.7 per cent. CMHC based that figure on a one-bedroom vacancy rate of 3.1 per cent, 15.9 per cent in the case of two-bedroom units and zero vacancy when it came to three bedrooms or bigger.
The drop in Red Deer’s vacancy rates didn’t result in higher rents, according to the CMHC survey.
The average overall rate in the city actually declined from April 2010 to April 2011, going from $787 to $767. In the case of bachelor suites, the average rent went from $595 to $584, one-bedroom units slipped from $708 to $702, the decrease for two-bedroom suites was from $840 to $820, and for apartments with three or more bedrooms the average rent fell from $946 to $912.
Among Alberta’s other biggest cities, the average April price for a two-bedroom apartment declined from $1,082 to 1,040 in the Calgary metropolitan area but increased from $994 to $1,029 in the Edmonton metropolitan area. It went from $851 to $866 in Grande Prairie, $843 to $859 in Lethbridge, $682 to $692 in Medicine Hat, and $2,060 to $2,152 in Wood Buffalo.
In Sylvan Lake, the average two-bedroom apartment rent jumped from $692 to $819 from April 2010 to April 2011, and in Lacombe the average during the same period went from $745 to $755.
The average same-sample rent increase for a two-bedroom apartment in Alberta’s urban centres was less than one per cent, noted CMHC.
CMHC’s rental market survey is conducted every April and October.
Extract of the Red Deer Advocate