Calgary multi-family rental-housing vacancy rose in 2024 after three consecutive years of decline, says the Canada Mortgage and Housing Corporation.

According to CMHC’s 2024 Canadian rental report, Calgary’s purpose-built rental apartment vacancy rate rose to 4.8% during the full year.

The agency attributed the rise in vacancies to a wave of new rental units that took longer to lease, particularly in buildings constructed since 2015.

Calgary’s stock of purpose-built rental apartments saw its most significant annual increase since 1990, growing by 10%, said the federal housing agency. The newer properties, often priced higher than older units, recorded a vacancy rate of 7.1%. Two-bedroom apartments, which command higher rents, saw significant vacancy increases.

“The surge in rental completions provided more options and eased market pressures,” CMHC reported.

Despite the vacancy increase, rental demand remained strong, driven by population growth fuelled by migration and stable economic conditions. However, the report noted that higher unemployment, caused by labour force growth outpacing job creation, may have influenced rental-market dynamics.

With strong construction activity in 2024, CMHC expects further expansion in the rental market in the coming years.

Affordability concerns persisted as Calgary’s average two-bedroom rent increased by 8.9%, the highest among Canada’s largest markets. The city’s rent-growth rate increase contradicted an overall sharp national slowdown in rent increases.

Canada’s average rent growth for a two-bedroom apartment fell to 5.4% in 2024 from a record 8% in 2023, according to CMHC.

Calgary’s rent gap between vacant and occupied units remained substantial, particularly in high-demand areas such as North Hill, Downtown, and the Beltline. Many renters opted to stay in their current units to avoid the higher costs of moving into newer apartments, according to CMHC.

Meanwhile, the condominium-rental market remained tight, with a vacancy rate of just 1.3%. As more purpose-built rental options became available, some renters opted for these units over condos, which often had more competitive rents and additional living space.

Altus Group Vice-president Ray Wong, a leading market analyst, told Connect that proposed condo-rental development projects could face challenges in coming years as the market continues to swing in favour of end users who want to live in the units and prefer larger spaces.

“In Calgary, it’s not just the pricing on the [rental] condos,” said Wong. “If you look at single-family housing [ownership], it’s actually more affordable in Calgary versus Toronto [which is grappling with a larger rental-condo oversupply.]”

Ultimately, CMHC’s report highlights a shifting rental landscape in Calgary, with increased supply offering more choices for tenants but also raising affordability challenges amid rising rents.

Pictured: Richmond Towers apartment complex in Calgary

Photo: Shutterstock.com