Renters tighten purse strings as prices in Alberta grow at fastest pace in 40 years
Average rent in the province up 14 per cent in past year, says Rentals.ca
Nikkie Miranda feels stuck and frustrated, weighing what she'll have to sacrifice when her rent increases again this winter.
Three years ago, when she moved into a two-storey, three-bedroom semi-detached home in southwest Edmonton, Miranda paid $1,650 per month in rent. Her rent later increased to $1,800 and will go up again to $1,950 when she renews her lease in February.
Miranda, 45, feels she can't move. The home offers a clean living space for her two adult sons, who have Hunter syndrome, a rare degenerative disorder. Miranda's third son, her oldest, shared the condition and was autistic; he died four months ago.
"I don't have the option of living in an apartment, or a shared accommodation-type home, because of the kids. There are just a lot of concerns with people smoking, or things like that, that becomes a health risk for them," said Miranda, who for years has worked beyond the typical eight hours per day to provide for her family.
"Anywhere I move, it's the same problem."
Many Canadians have had to stretch their budgets due to the increased cost of living. Federal data suggests rent is the latest necessity being severely affected by inflation.
In Alberta, rental prices inflated in the past year at a pace not seen in four decades, according to the most recent Consumer Price Index data from Statistics Canada.
Rent in Alberta in October was nearly 10 per cent higher than in October 2022 — the highest year-over-year increase Statistics Canada recorded in the province since the end of 1982. (The agency changed its methodology for tracking rent in early 2019.)
"Everybody has their own budgets and personal situation to wrestle with," said David Dale-Johnson, executive professor of real estate at the University of Alberta's business school.
"Things will get better. Inflation is certainly going to not stay where it is."
Alberta rents saw higher increases
The average rent for any residential rental property in Alberta was $1,876 last month, suggesting the rental market is still more affordable than provinces like B.C. and Ontario, according to data obtained from Rentals.ca.
But the average rent in Alberta increased 14 per cent from November 2022, which was higher than the other provinces Rentals.ca tracks. The data obtained excluded Yukon, the Northwest Territories, Nunavut, New Brunswick, Prince Edward Island, and Newfoundland and Labrador.
Rent in Calgary tends to be more expensive than in Edmonton, but prices in the capital city increased by a greater proportion this year, data shows.
Most rentals in Calgary, from studio apartments to three-bedroom units, are roughly $500 more expensive than in Edmonton. Rent is cheaper in Fort McMurray.
A two-bedroom unit in Calgary, for example, rents for nearly $2,110 on average, whereas a similar apartment costs $1,605 in Edmonton and roughly $1,445 in Fort McMurray.
Edmonton's average rent grew by 9.5 per cent from November 2022, slightly more than the 7.6 per cent growth in Calgary, data shows.
What's contributing to rent inflation?
Multiple factors are driving up rent, but especially migration and interest rates, Dale-Johnson said.
Alberta has been experiencing record migration for the past two years, mainly from people immigrating from outside of Canada. Many newcomers look to the rental market for accommodation.
Higher mortgage rates may prevent people from buying a home or force some homeowners into selling, resulting in further demand in the rental market, Dale-Johnson said.
Landlords and property management firms are also feeling the pinch, he said.
Building owners may have to renegotiate their mortgages; builders of new complexes have to cover increased borrowing and construction costs.
As a result, landlords and management companies may have to raise rents to cover costs or to remain in line with their agreements with lenders, Dale-Johnson said.
No one from the Alberta Residential Landlords Association was available for an interview. The Alberta Landlords Association did not respond to an interview request before publication.
Brandy Callihoo, who has always rented, feels some landlords are paying mortgages on the backs of their tenants.
"From a business standpoint, it makes sense to do that," she said. "But as a tenant, if I can't go into the bank and get a mortgage, how am I able to pay somebody else's mortgage?"
Callihoo and her husband once dreamed of buying a home, she said. The bank's stress test revealed they could afford it, but they would have been "pocket-poor," so the couple opted to rent to maintain a better quality of life.
They have lived in a bungalow in Edmonton's Hazeldean neighbourhood for five years. In that time, their rent has increased by several hundred dollars.
"You have to have a roof over your head, but then that just means that you have to go without certain things," Callihoo said.
Renters seeking affordable alternatives
The rental market situation has forced everyone to look for "alternatives that they can afford," Dale-Johnson said, such as having roommates, living at home with their parents, or living in a motorhome.
He described the latter as "maybe a bit extreme," but Edmontonian Laureen Hanlon is considering it.
Hanlon, 60, was a homeowner until her husband died in 2010. She has rented ever since, she said.
"The way [rent] has gone up is astounding," she said.
"I'm forced to work out of town to make the money I need."
Hanlon, a construction truck driver, pays $1,650 a month to rent the main floor of a house in the Forest Heights area. She has worked on projects like the TransMountain pipeline; she is back in Edmonton while a construction project in Prince George, B.C., is on hold.
She purchased a fifth wheel camper to live in while on-site, she said. But Hanlon, who described renting as "grim," has always been drawn to living on the road and is seriously thinking about leaving the city full-time.
"I'd rather live in the sticks in B.C."
ABOUT THE AUTHOR
