Several economic factors have all lined up in the past year to help support an increasingly popular multi-family residential market in Calgary.
And new data released by Zonda Urban indicates just how popular that particular real estate sector has become.
“2022 was a strong year for Calgary’s purpose-built rental market. Calgary experienced record-breaking vacancy levels and rental rates. Rental rates increased by 14.5 per cent ($0.33 per square foot) from the beginning of the year to an overall weighted average of $2.60 per square foot. This is a 17 per cent ($0.38 per square foot) increase from the same quarter of last year and remains the same as the third quarter. The growth in rental rates can be attributed to both increased migration to Alberta and the rising cost of living which has kept a portion of prospective home-buyers in the rental market,” says the company’s recent report on the market.
“Overall vacancy continues to trend downward ending the year at 4.8 per cent. This is a 0.3 per cent decrease from the third quarter of the year and a three per cent decrease from the fourth quarter of last year. 29 projects were launched during 2022 adding 3,078 new units to the market. Of those 29 projects, 19 were stabilized in the last year and only 15 per cent of those new units are still available.”
Zonda Urban says it is tracking 139 newer purpose-built rental apartment projects comprising 17,390 units across seven sub-markets, including Airdrie and Cochrane – 12 of these projects are actively leasing (under 85 per cent leased and within the first year of launching a leasing campaign), with the remaining 127 buildings having been substantially absorbed and experiencing typical levels of unit turnover.
It says it is currently monitoring 50 newer concrete rental apartment projects (9,120 units), 78 wood frame rental apartment projects (7,877 units) and 11 rental townhome projects (393 units) in Calgary through on-going primary research.
“Zonda Urban is currently monitoring 84 development permit applications (21,375 units) that have been submitted to the City of Calgary. Of those, 38 permits (12,728 units) are currently on hold. 26 projects comprising 4,554 units have been approved by the City and are expected to begin leasing in the next two to three years. Zonda Urban anticipates 17 of these buildings will be ready to begin leasing in the next two years, which will add over 2,586 new rental apartment units to the market,” says the research company.
The recent report says there were a record 4,082 sales recorded in Calgary’s new multi-family home market in 2022. It was the best sales year on record and 110 more than the previous yearly record set in 2014.
The numbers from Zonda Urban simply confirm the growing appetite in the housing market for multi-residential units.
That has been fueled by a strong Alberta economy that has created many jobs in the past year, rising population levels through migration from other provinces and newcomers to Canada, and higher costs of home-buying which have sparked interest in more rental than ever before.
Image Source: https://www.realpage.com/analytics/multifamily-market-outlook-fuel-left-tank/