Why Your Property Won’t Rent: Insights for Calgary, Alberta Landlords
As the year comes to a close, the Calgary rental market is experiencing a noticeable slowdown. According to recent data from the Canada Mortgage and Housing Corporation (CMHC), Calgary’s rental vacancy rate was approximately 2.7% in 2023, a drop from the previous year’s 3.6%. Despite this, there are signs that the pace of rent growth is slowing after several quarters of double-digit increases. This change, combined with the typical seasonal dip during the colder months, contributes to the current challenges landlords face in renting their properties.
Timing and Market Cycles
While some property owners might consider waiting for the market to rebound, our experience tells us that it’s not wise to sit on vacant units. Rental cycles are unpredictable, and the loss of income from an unoccupied property cannot be recouped. This is particularly important after a period of steep rent hikes, where market momentum may slow as the year winds down.
Key Elements to Ensure Your Property Rents
To attract potential tenants and maintain occupancy, it’s crucial to:
1. Price Competitively: Overpricing is one of the main reasons properties remain vacant. The average rent for a two-bedroom apartment in Calgary rose to approximately $1,900 by late 2023, yet pricing needs to reflect the realities of the market, not just past peaks.
2. Ensure Cleanliness and Presentation: A well-maintained and visually appealing property will attract more serious inquiries. Homes that are "show ready" create a stronger first impression and can help secure long-term tenants.
Shifts in Market Segments
While the rental market as a whole has cooled, certain segments remain robust. Executive single-family homes in prestigious areas like Mount Royal still draw significant interest from high-income renters seeking luxury accommodations. On the other hand, the surge in the construction of purpose-built one- and two-bedroom apartments has resulted in increased supply. This has led to higher vacancy rates in these specific categories, prompting landlords to offer incentives such as one month of free rent or reduced deposits to attract tenants.
Adjusting Expectations
We believe it’s important for property owners to have realistic expectations based on current market trends. Just because a property rented for $3,000 per month a year ago doesn’t mean it will command the same rate today. Media coverage often dramatizes market highs and lows, which can skew perception. As property managers, our goal is to educate owners about these fluctuations and help them navigate the current environment effectively.
Final Thoughts
Understanding Calgary’s rental landscape is key to making strategic decisions. Whether you work with us or manage your property independently, staying informed and proactive is essential. The current market might not be as heated as last year’s, but with the right approach, landlords can still maximize their property’s potential and minimize vacancy periods.
