In a strange set of circumstances, Edmonton is in a rare moment where there are an abundance of rental properties, and maybe not enough bodies to fill them all. The discovery came this month from Edmonton’s chief economist, John Rose, who pointed to a number of factors that have led to the interesting situation. Here are some of the causes of the recent rental issue in Edmonton and how it could affect you or your future real estate purchases.
One of the major reasons that Edmonton is going to have a rental property abundance actually has little to do with the present and everything to do with the past. Last year, the announcement of The Oliver, a downtown rental apartment block that’s dedicated to “luxury” living, was noted as being the first purpose-built rental apartment building in a few decades. Those who’ve lived in the city their entire lives will know full well the buildings downtown have been there for over 30 years, but few know that no new ones have been built. And while this led to a shortage in the past few years, now that The Oliver has set a trend for rental properties, things are beginning to change, putting renters in a bargaining position that Edmonton previously did not have.
Another cause of the reverse rental crisis, as it were, is the slowed migration to Alberta. In years previous, the rental market was flooded with newcomers who were just getting their start in the province. They’d rent an apartment for a couple of years, build up a down payment, and go looking for a house. Edmonton’s combination of high standards of living and low housing costs made this a more than possible dream. But now, less and less people are heading to Alberta, which means less and less people are looking for a quick place to stay.
Finally, while Edmonton’s real estate market has slowed as a result of a slowing oil boom, this doesn’t mean that all sectors of the economy have stalled out. In fact, many aspects of Alberta’s economy are doing just fine, and that means there are people with money looking to buy, especially now that they don’t have to compete with people making lots of money on the rigs. Nurses, support workers, and more are all now in a unique position to buy a home, something not previous even five years ago.
What the rental abundance means for you, however, depends on your situation. If you’re looking to rent, you may be in a unique position where landlords are courting you instead of the other way around. If you’re looking to purchase some rental property, this year may not be the best time to do so if you’re looking to rent it right away at a fairly good rate. And if you’re in a growing sector of the economy, you may be able to find a home and move out of the rental for good.