Report shows Albertans' interest in real estate as rent costs climb

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Nearly a third of Albertan renters considered buying a property before signing their most recent lease, according to a report from Royal LePage.

The renters report showed that 29 per cent of Albertans considered buying, while 45 per cent said they didn’t. At just under one-third, Albertan respondents were level with the national average of respondents who said they considered buying. The results come amid rising rental costs and a provincial housing market that has attracted not just attention, but also people from out of province.

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“The rental segment has been in transition these past few years. We came out of a balanced market that had healthy vacancy levels and robust demand, and headed into a crunch starting in the spring of 2022,” said Andrew Hanney, sales representative and property manager for Royal LePage Mission Real Estate in Calgary, in the report.

As almost a third of renters may be looking to jump into the housing market, rental prices are on the rise.

The rental report cited the Canadian Mortgage and Housing Corporation’s (CMHC) data, which indicated a 6.4 per cent increase in rent for a two-bedroom apartment in Edmonton from October 2022 to 2023. In October, the rent was $1,398 per month but as of May, the Realtors Association of Edmonton reported the average to have already risen to $1,480 for a two-bedroom apartment in the city.

The increase in prices, unsurprisingly, runs in tandem with a hefty decline in vacancy rates. CMHC rental data from last October shows that from 2021 to 2023, the vacancy rate of rentals in Edmonton dropped from seven per cent to 3.5 per cent to 1.9 per cent for two-bedroom apartments.

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Royal LePage reported that the demand is high in Calgary, too.

“We are now in a scenario where multiple offers on rental properties are being seen more frequently, a new phenomenon in Calgary,” said Hanney.

The demand for rentals rose sharply in Alberta over the past three years, which coincides with a surge of interprovincial migration. In a special ATB report released in May titled Chasing Affordability: The return of interprovincial migration to Alberta, ATB chief economist Mark Parsons demonstrated why the ongoing rush of migration to Alberta is different from previous Alberta booms.

According to Parsons’ report, Alberta welcomed more than 200,000 people to the province last year, more than 50,000 of whom were from other Canadian provinces.

“No other province has recorded an annual increase of that size since comparable data became available in 1972,” said Parsons.

The report argues that relative housing affordability is the single biggest driver for the migration, a conclusion it reaches by comparing the current rise in population to ones of the past.

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As longtime Albertans have seen, when the economy is up, or oil investment is up, or the unemployment rate is down, the province’s population tends to rise. But the current increase bucks that trend. It’s not that the economy or the oil and gas industry is performing poorly, investments just aren’t as high as they were in 2004 to 2008 or 2011 to 2014, according to Parsons.

ATB’s report indicated that most of the interprovincial migrants are coming to Alberta from Ontario and British Columbia, where issues with housing affordability are hitting the hardest.

“Demand for rentals in Alberta has been coming from all directions, including residents relocating from Ontario and British Columbia in search of a lower cost of living,” said Hanney.

According to the renters report, Ontarians and British Columbians spend more of their income on rent than Albertans, so even though the price of rent is on the rise for the province, it’s likely less shocking for those coming from out of province.

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