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According to Zonda Urban, an analytics firm that tracks real estate and rental data, roughly 5,000 new purpose-built market rental units are expected to come on stream in Calgary in the coming year, with 3,000 more expected after that.
“2022 was a year of extremes for the multi-family market in the GTHA,” Pauline Lierman, Vice President Market Research for Zonda Urban said. “The pace of sales tested historic highs at the start of the year – first half sales were ahead by 3 per cent over 2021, then the successive interest rate hikes inverted those gains to a 60 per cent year-over-year drop during the second half.”
Across Metro Vancouver, there are more than 20 towers over 45 storeys that have been approved by municipal governments, according to data from Zonda Urban market analyst Justin Lee. More than half of these are in Burnaby. Five are in Coquitlam and Port Moody, while Downtown Vancouver, New Westminster and Surrey have one each.
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“There has been a lot more interest in the rental market,” says Kendall Brown, market analyst for Zonda Urban, adding the trend is likely to continue.
Yet Edmonton’s new purpose-built rental market experienced even less growth in 2022, with rents increasing about two per cent for a one-bedroom to about $1,400 a month, Zonda Urban data for its third quarter report shows.
“Overall, Edmonton is more traditionally known as a more purpose-built rental and single-family home market,” says Cameron Slavik, analyst with Zonda Urban.
“Edmonton has seen a similar trend to Calgary with lower vacancies at an average of 8.5 percent across the market,” says Kendall Brown, manager of rental data for Zonda Urban for Alberta and Ontario.
“Lower vacancy can be attributed to the absorption of new supply that occurred last year as demand has increased with the return of students and young professionals,” Brown says.
Despite rising demand, rents per square foot decreased slightly. Average rents decreased 2.2 per cent from the third quarter of 2021 to the fourth quarter. Brown notes the drop in rent is due to the rise in supply, but also seasonality of the rental market with fewer people moving during the fall and winter.