Edmonton Rental Market Update - December 2021

Entering into the final month of 2021, we at Davies Property Management wanted to provide our owners with a quick update of the Edmonton rental housing market. 2021 has been an interesting year, to say the least, — common perceptions about the Edmonton rental market and what statistics show were not quite aligned.  

Looking at the national residential rental rate trends from September 2020 to September 2021, there was a 1.6% rent increase on average. This means that a property renting for $1,000 in 2020 is likely renting for $1,016 today. In Edmonton, the rental increase amount is slightly higher among detached single family homes, duplexes and townhomes averaging at around 2.5%. However the rental rates for condo apartments, multifamily apartment units and basement units were lower compared to last year.  Even though the average rent has increased overall in Edmonton, the increase is uneven among the different types of properties.

Without major influx of immigration, corporate relocation and new job seekers, most of the tenants seeking rental units are current renters moving to different types of units,or different areas because of needs, affordability and opportunities. During the pandemic many children and adults are studying and working from home, as such most tenants are looking for more space; meaning those in 1 bedroom apartments are looking for two bedrooms and those renting 2 bedroom condo apartments are looking for 3 bedroom townhouses to spread out. For the same reason of needing more space, many Condo Apartment owners also decided to sell or rent their property and buy a townhome or a detached home.  As a result, sales of single family dwellings have seen a mini boom this year with properties being sold quickly and sometimes attracting multiple offers.  Many condo apartments on the other hand were not sold and ended up being offered for rent.  In addition there are also many new Condo apartments construction that was completed and added to the rental market. The net result is an oversupply of condo apartment units pushing rental rates lower.

As the rates for Condo apartments drop, some tenants who are concerned about Covid19 and shared laundry are relocating to condo apartments or suited single family units with in suite laundry.  While most of the universities are open, in person learning is not yet returned to pre-pandemic level.  We have not seen mass absorption of rental units from students.  It would suggest that many students did not return to continue their studies or had made arrangements to study online. 

Many tenants living in multifamily units and basement units are first time renters who have moved out of their family home to start a life of their own.  Many of these tenants were the first to be laid off during the pandemic lockdown.  Although most were able to pay their rent due to massive government support, many still struggled today to get enough hours to pay their bills and some have given up the hospitality or retail industry and went back to school.  Some of these young people ended up moving back to live with their families or sharing an apartment / house with friends to lower their housing costs.  With limited young job seekers relocating to Edmonton, it is taking longer to rent multifamily & basement units and often for a lower rental rate.

Beyond the Edmonton area, surrounding cities also saw changes to their rental rates in 2021: St. Albert (3.3% increase), Spruce Grove (0% increase), and Leduc (1% decrease).

So, what does this mean for landlords and rental property owners? Chances are, your rents are not increasing much or at all, but your taxes, insurance, utilities and condo fees have probably gone up with interest rates under pressure to increase as well. Currently the rental rate is not keeping up with inflation.  In 2022, we see this trend is likely to continue. So as a landlord, be prepared for that and one way to overcome this is to update your property so that it stacks up to compete with the newer units. 

If you have questions about owning or effectively operating Edmonton rental property or want to know what this means for your portfolio, give our team a call! We are happy to do a free analysis on your property and provide you with neighborhood and rental trends. 

Let us help you as we step into 2022. 780-484-2866.