New apartment buildings have been popping all up over downtown in the past few years, like the Ultima Tower. (Photo by Austin Connelly)
City Centre rent isn’t rising with
the rest of Edmonton – for now
By Jackson Spring
A NEW REPORT from the Canada Housing and Mortgage Corporation shows that finding an affordable apartment in Edmonton has become more difficult over the past year – unless you live in downtown or Oliver, where prices stayed about the same and vacancies rose.
The crown corporation’s annual Rental Market Report, released on Jan. 15, 2020, recorded rental data from late last year and found that average city-wide rents have risen from $1,131 to $1,144 in 2019, while vacancies have fallen from 5.3 per cent to 4.9 per cent.
The CHMC found that, while still above the city-wide average at $1,181, rents in Oliver, downtown, Boyle Street, and Riverdale (which the report refers to collectively as “Downtown”), bucked the trend, declining slightly from $1,184 in 2018, while vacancies have risen from 5.4 per cent to 5.7 per cent.
Eric Bond, a senior specialist in market analysis at the CMHC, says one of the main factors contributing to this difference is the City Centre’s abundance of old buildings relative to newer neighbourhoods outside the urban core.
“A majority of the rental units downtown are older buildings constructed before 1980,” Bond said via email. “Given the availability of apartments around that area, new tenants may prefer newer units in other neighbourhoods.”
Older apartment buildings also have a tendency to keep prices low because of their depreciated value.
However, the ongoing development of the City Centre could shake things up in the years to come.
In 2019, Edmonton City Council approved an estimated 800 residential units for Oliver and 700 for downtown to be constructed over the next few years, in addition to those already planned for these areas, which number more than 1,000.
While the construction of new units is usually good for renters, at the current rate of construction, the CHMC predicts it is unlikely to outpace the demand for housing as Edmonton’s population grows. This means rents will continue to rise, and vacancies will continue to fall. In its Housing Market Outlook released last October, the CHMC forecast that by the end of 2020, city-wide rent will have increased by an average of $28, while vacancies will have fallen to 3.4 per cent.
While the CHMC does not forecast rental data for specific neighbourhoods, Bond says that the City Centre could become less resistant to this trend as rapid development of the area continues.
“Downtown Edmonton currently accounts for approximately one-quarter of both purpose-built and condo apartments currently under construction.”
As these projects are completed over the next couple of years, some of the demand for rentals is likely to shift onto the area, aligning it with the rest of the city.