Calgary Rent Prices Up 5.8% In August, 28.3% YoY
Something incredible just happened in Calgary - according to Zumper, rental prices increased 5.8% from July to August 2022!
1 Beds increased by 28.3% YoY (5.8% from last month) to $1,450/mo.
2 Beds rose by 24.8% YoY (4.3% from last month) to $1,710/mo
This is the largest increase of any of the 24 Canadian cities monitored by Zumper
Even with these increases, Calgary still ranks as the 15th most expensive city in Canada while being the 4th largest city in the country.
If Calgary rent was priced according to the size of the city:
1 beds should be renting for almost $2,000/mo
2 beds should be renting for over $2,500/mo.
Why Is This Happening?
Calgary had been in a recession from 2015 up to 2020 due to the previous collapse in oil prices. During that time there were huge layoffs and people were leaving the city causing property prices and rents to decline. In 2020 the economy really stabilized and huge numbers of new well paying IT technology jobs began to flood the city bringing people back into the city.
Now, more and more people are moving to Calgary from all over Canada, in fact Alberta was the #1 inter-provincial destination within Canada. Recently there has also been an increase of international immigration which opened up opportunities available here that were inaccessible due Covid restrictions easing up recently as well with rising interest rates making purchasing homes less affordable now forcing most potential buyers into renting instead.
With this increased demand, the market has also seen a decrease in available rental properties of almost 44%. The average days-on-market for rental properties is only 28 days, down 52% from this time last year and relates to a tight rental market.
Calgary is Still Incredibly discounted
I’m still shocked and how undervalued Calgary is from a price and rental perspective - both should be MUCH higher. I believe this will be corrected over the next 5 years:
Calgary is benefiting hugely from high oil & gas prices due to the conflict in Ukraine
The exploding tech sector in the city is adding many new, high paying jobs
Large urban environments will recapture the populations they lost during Covid, plus more
Remote work possibilities mean people are going to move to low-cost cities, especially and ones that offer incredible living standards
But perhaps the most important factor now is that when new Canadian immigrants land in large cities like the GTA/Vancouver/Montreal, the high property prices thigh will push them to lower cost cities like Calgary (who would buy you buy a 1 bedroom without parking for $700,000 in downtown Toronto when you can buy a detached house in Calgary with a legal basement unit for that price). The decision will be simple for a lot of people …
Now is the time to be investing in Calgary:
You are able to lock in low purchase prices today (condos in Calgary have still not hit record highs since 2014)
You are able to leverage your money 10:1 – you are only giving a small deposit but getting appreciation on the full purchase price
With pre-construction you delay closing for several years, no need to get tenants or worry about a mortgage now
Rents continue to increase significantly, offsetting extra interest rate increases
When interest rates inevitably come, you can be MASSIVELY cash flow positive
Investing in Calgary is a once-in-a-generation opportunity that is quickly closing. If you are thinking about investing in real estate, this is the perfect time. If you already have a real estate portfolio, now is the time to be expanding and diversifying in to Calgary.
