Apartment-hunting in Downtown used to feel like job-hunting. You had to pound the pavement, make repeat calls and offer up references to make the cut. Over the last decade, a large influx of migrants has driven vacancy rates down and rental fees way up, so with limited options rental costs across Edmonton have nearly doubled since 2005, to $1,259 for a two-bedroom. But the tables are finally turning in the renter’s favour.
In the last year, vacancy rates have risen from 1.7 per cent to 4.2 per cent and landlords are now offering all kinds of incentives to anyone willing to sign a one-year lease, including a free month’s rent. Developers have finally responded with new apartment buildings. Not only has this freshened up the outmoded existing stock, predominantly built in the 1960s and ’70s, but according to City of Edmonton chief economist John Rose, it’s resulting in a soft decline of rental fees.
“We are near record levels,” he says, pointing to the most recent Canada Mortgage and Housing Corporation rental market report showing that more than 2,500 city-wide apartment units were under construction last year—double 2014’s already promising construction numbers. Many of these new residences are in the core: Mayfair Village North on 109 St., the Hendrix tower and row-houses in Oliver or the 10 storeys atop Planet Organic’s new home. Even more are proposed around MacEwan and the Ice District. “The important thing here is that a lot of it is dedicated rental. They tend to be less expensive than [repurposed rental] condos,” he notes. “Dedicated rental is a factor in preserving affordable housing.”
The waning economy is also a help to renters; new workers tend to ease into cities through rentals first before homeownership, but with job growth slowing in Edmonton, so too is demand. This slope might give some apartment developers cold feet, says Jandip Deol, Colliers International Canada’s associate vice-president of multifamily. Towers that up until now were likely to open as apartments may, in the end, revert to condos. As well, buildings built in the last decade have the most vacancies, according to the CMHC. Unsurprisingly, they’re also about $450 more per month.
But Deol thinks the Downtown apartment market will grow because of its burgeoning amenities and appeal to young professionals willing to pay more for something they’ll never own—so long as the finishes are good as new. “A lot of people my age understand the value of renting—cash flow is king,” says the 31-year-old. “Living Downtown and walking to work, to the corner store for groceries, is appealing. But you can still get up and leave if you’re sick of the place, as opposed to being forced to hold onto your place because it’s not feasible to sell today.”