(aka “Be careful what you wish for”)
“We recently moved into a new rental. The search was brutal. We went to numerous open houses and met numerous landlords and they all had plenty of people to choose from and even though we’re desirable renters it’s largely a first come first serve situation and involves a lot of luck…wow it was shocking how many renters and how few properties are out there.”
Two stories were on the CBC’s Eyeopener this morning about the difficulty in finding rental accommodation in Calgary.
“…101 people viewed the one bedroom beltline apartment Gonzalez had his eye on. Fifty people filled out applications and, after two interviews and a stringent screening process, Gonzalez landed the suite — a gruelling process he’s never been through before.”
Darren Paddock, the co-owner of RentFaster.ca, advises renters to find ways to help them stand out from their competitors because properties are going fast. He says “These people are getting a number of applicants in two to three days time…It’s really hot, we’ve never seen it like this before.”
Paddock also says an influx of workers and tighter mortgage rules are to blame.
Once again, we see the law of unintended consequences rear its ugly head. With the new mortgage rules making it more difficult to buy a house, people turn to renting, with the result of higher rents and a shortage of accommodation.
What happens next? Investors start finding it more attractive to buy houses/apartments and rent them out. The increase in demand for investment property will in turn put upward pressure on prices.
The vacancy rate in Calgary is already at a very low 1.9% and is predicted to tighten even further to 1.5% by 2013.
A Calgary Herald article back in February was warning of a coming rental crunch:
Research at the University of Calgary noted that from 2000 to 2008, an average of less than two per cent of all new dwellings constructed in Calgary were intended for rental accommodation.
It also pointed out that from 2001 to 2009, Calgary lost about 7,500 apartment units to condo conversions. The “lack of rental housing construction meant that the condominium conversions contributed to a 19 per cent loss in the absolute number of rental housing units between 2001 and 2009,” the report said.