Renter's market in Calgary forcing some landlords to drop prices

It's a renter's market in Calgary for mid- to higher-priced properties as demand for rental accommodation drops in a weakened economy.

"If you want to drop your prices, just go ahead, don't be scared, having a lower rent is better than no renter," said Bany Declair, who rented out her three-bedroom townhouse in Marda Loop for $2,950 per month last year.

She's had to drop the rent $700 and offer an incentive — the first month for free. 

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It's taking landlords longer to rent their units than it did a year ago, according to Gerry Baxter with the Calgary Residential Rental Association.

While Calgary's current vacancy rate is 0.2 per cent, according to the CMHC Spring Market Report released in mid-June, he says it has likely increased slightly since the survey was done, based on what he's hearing from his members. 

Some are offering incentives, while others have lowered their rents, particularly those who were renting at higher levels. Low to mid range — $800 to $1,100 — are less likely to follow that trend, he says. 

Adjusting rents downward is not something landlords in Calgary are used to, with vacancy rates among the lowest in the country for several years, according to Darren Paddock, who runs the website RentFaster.ca.

"It's definitely sticky on the way down, like it's easy to increase the price 20 per cent if you are a landlord, it feels good. But coming down it takes a bit of time and it takes a bit of a realization that the market has changed," he said.

Alberta's rental market has been fuelled by a hot energy economy and low unemployment, with rents increasing year over year, Paddock says.

As the economy has slowed, with layoffs and fewer jobs available, he says the demand for rental housing has changed, but apartment and condo construction has continued.

"Landlords have grown accustomed over the last couple of years of being able to be very picky with their restrictions on pets and smoking and credit and so forth, and those are some of the adjustments that will have to be made now as the market shifts towards more of a renter's market," Paddock said.

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That means landlords will have to lower their prices as supply goes up.

"Especially the ones that had their prices stretched upward, because they could, because there was very limited supply for the past few years so those prices did increase," said Paddock.

"Whether that's maintainable, even if the economy gets stronger, I'm not sure, because, like, if you look downtown there's still a lot of cranes in the sky —  there's still a lot of units coming and they will be pushed into the rental market," he said.

It's a scenario that renters will welcome, and Calgary landlords will have to accept that as they do in other cities, says Declair, who's from Montreal.

"When you have lived in other cities on the planet, especially Montreal, landlords, they cannot, with no reason, raise the rent," she said.

"Here in Calgary we can ask the tenant out, we can raise the rent as much as we want. This is not a fair thing for the renters so I think this whole situation, I don't take it as a bad thing... now I think its better for renters and they have more options."