Inflation in Alberta is falling but rent increases highest in country, new CPI report says

Alberta saw the largest, year-over-year increase in rental prices in Canada last month, according to the latest Consumer Price Index report released by Statistics Canada.

Compared with the same period last year, the price of newly listed rentals in Alberta rose by 16.2 percent.

The hike comes as the country's Consumer Price Index (CPI) continues to decelerate, dropping to 2.7 per cent in April from 2.9 per cent in March, driven largely by food prices, services and durable goods.

While inflation nationwide is becoming more manageable — some economists say the Bank of Canada could start cutting interest rates at its next meeting on June 5 — continued demand for housing in Alberta is keeping that market stretched. 

As University of Calgary economist Trevor Tombe noted on social media Tuesday, rents are a key factor in why Calgary's inflation rate was the highest in the country at 3.6 per cent — 0.9 points higher than the national rate.

"I estimate that most (0.5 points) of this gap is accounted for by faster rent increases in the city," Tombe wrote on X.  

Experts say ongoing population growth in Alberta is a driving factor in the inflated rent numbers.

"Alberta is a really different situation to the rest of Canada, because asking rents on average are much less than we're seeing in areas like Ontario and British Columbia," said Giacomo Ladas, communications manager at Rentals.ca, which provides housing data to Statistics Canada.

"We're seeing a high level interprovincial migration … and [people] going to Edmonton, they're going to Calgary." 

Ladas said supply has increased across the province, but it hasn't been able to keep pace with demand. 

Shared accommodation listings up

To cope, renters in the province are looking to save a buck wherever they can. Rentals.ca's latest national rent report shows that Alberta has the highest rates in the country for asking rents for shared accommodations. 

Listings looking for roommates grew 11 per cent in April, compared to the previous year. 

"[In] Edmonton a one bedroom apartment right now on average is about $1,300, and a two-bedroom is just shy of $1,700," said Ladas. 

"So if you can find a roommate and have the shared accommodation listing, you can really save on rent."

Finding ways to offset high mortgage rates is another reason shared accommodation listings are up, as homeowners seek to rent out basement suites or rooms to help cover the costs, added Ladas. 

Mark Parsons, chief economist with ATB Financial, says high mortgage bills will eventually be roped in with future interest rate cuts, but that that same level of control can't be extended to the rental market. 

"What's more concerning is rent inflation. So rents captured in the consumer price index continue to go up at a really, really fast rate … so we expect rent inflation to be sticking around for a little bit longer."

Parsons doesn't expect Alberta's population growth to dwindle anytime soon either. 

"What we're seeing is not just something coming from the oil and gas sector heating up … which in the past has drawn a lot of workers to Alberta," he said.

"What we're seeing is something much broader, getting growth across a wide variety of sectors, but also people dealing with the cost-of-living crisis in housing affordability ... are being drawn to Alberta as relatively more affordable."

He added remote workers who have retained their employment in other provinces but moved to Alberta are also contributing to the climbing population numbers. 

If the Bank of Canada does decide to cut rates this summer, Ladas said the rental market may loosen up, as more people start to look at buying a home.

"There's a lot of people who are renting that would otherwise have gone into home ownership who are kind of waiting on the sidelines right now until we potentially see interest rates go down."